Quick answers to key questions • 5 QUESTIONS 1 What is the NCLT repayment plan approved for Subhash Chandra?
2 Why did HDFC Bank oppose the NCLT repayment plan for Subhash Chandra?
⌵ HDFC Bank opposed the repayment plan as it represents only 3.2% of their total admitted claim.
⌵ The case began with a ₹170-crore loan taken by Vivek Infracon, for which Subhash Chandra was a personal guarantor.
The case pertains to what government sources described as "an exceptional personal-guarantor resolution" matter involving Zee Group's Subhash Chandra.
HDFC Bank plans to appeal before the National Company Law Tribunal (NCLT) against the latter's approval of a ₹6.5 crore repayment plan, in the admitted claim of ₹22,006.57 crore, to resolve the personal insolvency proceedings of Zee Group founder and chairman emeritus Subhash Chandra.
In a statement, India’s largest private lender said its admitted claim in the matter was only 3.2 percent of the total stated claim amount. The bank also clarified that the facility involved in the proceedings was inherited by the HDFC Bank from HDFC Ltd.
"With regard to the referred NCLT matter, HDFC Bank's admitted claim was only 3.2 per cent of the total stated claim amount," the bank said.
Quick answers to key questions • 5 QUESTIONS 1 What is the NCLT repayment plan approved for Subhash Chandra? ⌵ The NCLT approved a repayment plan allowing creditors to receive around ₹6.5 crore against admitted claims totaling ₹22,006.57 crore, reflecting a significant reduction in recoverable amounts. 2 Why did HDFC Bank oppose the NCLT repayment plan for Subhash Chandra? ⌵ HDFC Bank opposed the repayment plan as it represents only 3.2% of their total admitted claim. The bank expressed concerns over the substantial haircut involved in the approved plan. 3 How did the insolvency case against Subhash Chandra originate? ⌵ The case began with a ₹170-crore loan taken by Vivek Infracon, for which Subhash Chandra was a personal guarantor. When the loan defaulted, Indiabulls Housing Finance initiated insolvency proceedings against him in 2022. 4 Why is the recovery rate so low in Subhash Chandra's insolvency case? ⌵ The recovery is low due to the substantial difference between the admitted claims of ₹22,006.57 crore and the approved payment of ₹6.5 crore, which indicate that creditors are recovering only a fraction of their claims. 5 What implications does the approved repayment plan have for Subhash Chandra's creditors? ⌵ The approved repayment plan, allowing for a recovery of just ₹6.5 crore, means that creditors will face a haircut of nearly 99.97%, recovering only about three paise for every ₹100 owed.
The bank said it had opposed the resolution and voted against the repayment plan, which was nevertheless approved by the majority of creditors.
What's the case exactly? The case pertains to what government sources described as "an exceptional personal-guarantor resolution" matter involving Zee Group's Subhash Chandra. The roots of the case go back to a loan taken by Vivek Infracon, according to NDTV.
Chandra had provided a personal guarantee for a ₹170-crore loan. When the loan went bad, Indiabulls Housing Finance moved against Chandra. The lender filed the insolvency case in 2022. The NCLT later admitted the personal insolvency proceedings against Chandra in April 2024.
Indiabulls Housing Finance, meanwhile, was renamed Sammaan Capital in 2024. There was an earlier attempt to settle the matter. But that settlement did not ultimately materialise, NDTV reported.
After the Supreme Court upheld the relevant provisions of the IBC in November 2023, the insolvency proceedings were revived in February 2024.
Lenders said that admitted claims worth ₹22,006.57 crore. The repayment plan offered only ₹6.5 crore.
'Never personally borrowed money' Chandra said earlier he had never personally borrowed money from the lenders. “There is no personal borrowing by Dr. Subhash Chandra from any of the creditors named in the order or from any other creditor/lender. He only signed personal guarantees,” the statement said.
Meanwhile, government sources also said that the ₹22,006 crore figure does not represent money personally borrowed by Chandra. It represents claims admitted against him as a personal guarantor for loans taken by several Essel/Zee-linked companies.
The distinction is important because the insolvency proceeding is against Chandra in his capacity as a guarantor and not against the companies that originally borrowed the money.
Government sources also stressed that the case is an exceptional personal-guarantor resolution and should not be seen as representative of recoveries under the Insolvency and Bankruptcy Code.
Claims of only ₹ 3,992 crore, not ₹ 22,000 crore Media baron Subhash Chandra on Thursday said the total claim against him in the personal insolvency proceedings is only " ₹3,992 crore", for which he was only a personal guarantor and not the borrower.
In a statement issued from his office, the Chairman of Essel group, which owns Zee Media, said the total claims in the insolvency proceedings should not be equated with the current amount outstanding.
He said while claims filed in the proceedings totalled about ₹22,006 crore, of which ₹21,696 crore were admitted, the claims of lenders that have objected to his repayment plan stood at ₹3,992 crore. Of this, ₹620 crore has already been settled, leaving ₹3,372 crore, he said.
In a statement reacting to dissenting creditors' claims of ₹22,000 crore against him, Chandra said he "has not borrowed any money from any lender...Total claim against Subhash Chandra as a personal guarantor, in the personal insolvency proceedings, is only ₹3,992 crore by the objectors of the plan and not ₹22,000 crore," he said.
Out of which, also a claim of ₹620 crore has been settled and a further ₹1,063 crore offered to be paid by the borrower entities. Chandra also claimed that the companies for which he had given guarantees had borrowed nearly ₹45,000 crore as of January 2019, of which about ₹43,000 crore had since been repaid.
"The borrowing entities for whom Chandra has provided personal guarantees have till date repaid ₹43,000 crore," the statement said, adding, "The borrowing entities have assured to settle any other amount which might have left."
What's the NCLT repayment plan? The National Company Law Tribunal (NCLT) this week approved a repayment plan for Zee Group founder Subhash Chandra, allowing creditors to receive around ₹6.5 crore against admitted claims totalling ₹22,006.57 crore.
The quasi-judicial body approved a personal insolvency repayment plan for Zee Group founder Subhash Chandra, allowing him to settle ₹22,006.57 crore in creditor claims for just ₹6.5 crore.
Under the approved plan, dissenting creditors would be bound by its terms. The NCLT also directed that two individuals be removed from the creditor list and that the amount allocated to them be redistributed among eligible creditors.
HDFC rejects NCLT plan HDFC Bank's latest statement now adds another legal dimension to the case, with the lender indicating that it could challenge the NCLT's approval before the appellate tribunal.
HDFC Bank Ltd. had opposed and voted against the NCLT plan, which was approved by the majority of creditors, the lender said in a media statement Thursday. The loan, inherited from HDFC Ltd., represents 3.2 percent of the total admitted claims, it said.
As of now, the bank only said it is exploring filing an appeal at the NCLAT and has not stated that an appeal has already been filed.
"If the plan is approved and the debtor's insolvency is resolved, putting him back on his feet, the objectors would ultimately stand a better chance of recovering their debts directly from the Principal Debtors," NCLT observed.
Meanwhile, Chandra defended the ₹6.5-crore repayment plan, saying his personal assets stood at ₹31.79 crore in 2024, including a residential property worth around ₹25 crore.
The matter will now go back to the original division bench for a formal order in line with the majority opinion, as required under Section 419(5) of the Companies Act, 2013.
The big haircut Recent reports compared claims of more than ₹22,000 crore with around ₹6.25 crore proposed to be recovered from Chandra's personal estate, describing it as a haircut of nearly 99.97 per cent. Government sources said that comparison does not reflect the full picture.
"The reported 99.97% haircut is therefore not a 99.97% loss on ₹22,000 crore of bank loans," according to the government note. It said the reduction relates specifically to what can be recovered from Chandra as a personal guarantor.
