New Delhi : Subhash Chandra, founder and chairman emeritus of the Essel Group, is facing a fresh challenge to a debt repayment plan that would see him pay Rs 6.25 crore against claims of around Rs 22,006 crore. The repayment plan envisages around Rs 1,494 crore from the principal borrowers, while Chandra’s personal contribution is Rs 6.25 crore. Subhash Chandra is the chairman associated with the Essel/Zee group of companies.
Chandra did not personally borrow Rs 22,000 crore. Instead, the amount represents the total claims admitted against him in his capacity as personal guarantor for debt raised by the principal borrowers. In simple terms, companies linked to the Essel/Zee group borrowed money from lenders, and Chandra provided guarantees backing some of those borrowings. When the borrowers faced difficulties in meeting their obligations, lenders pursued the guarantees as well, leading to the insolvency proceedings against Chandra.
As per the report, only Rs 2,574 crore of the admitted claims relate to loans where Chandra’s personal guarantee was provided at the time of the original borrowing. The government officials said most of the other guarantees were given later as additional security. LIC Housing Finance had opposed the repayment plan, arguing that a payment of Rs 6.25 crore against admitted claims of approximately Rs 22,006 crore was too small.
HDFC Bank has now confirmed that it had opposed and voted against the resolution and is exploring filing an appeal before the NCLAT, ET reported. Although several major lenders opposed the proposal, the repayment plan received 80.8% of the voting share of the Committee of Creditors.The NCLT had earlier noted that the objecting creditors together held less than 20% of the voting share, while the plan had secured 80.81% support.
The NCLT also held that its role was not to replace the commercial judgment of the creditors or decide whether the amount offered under the plan was adequate, as long as the decision operated within the statutory framework. According to the NCLT order, the resolution professional’s valuation showed that Chandra’s personal estate was worth significantly less than the amount proposed under the plan.
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