In a significant development, LIC Housing Finance and Union Bank of India have announced their intent to appeal against the National Company Law Tribunal's (NCLT) approval of a repayment plan for media baron Subhash Chandra, founder of Essel Group.
The controversial NCLT-approved plan mandates Chandra to pay approximately ₹6.5 crore to resolve personal insolvency proceedings, despite admitted creditor claims totaling ₹22,006.57 crore. This repayment structure implies a staggering 99.97% haircut for creditors, recovering only about 0.03% of the total claims.
Creditors Unite Against Repayment Plan
LIC Housing Finance confirmed its decision to file an appeal before the National Company Law Appellate Tribunal (NCLAT), stating it would do so alongside other public financial institutions, including Canara Bank. The institution highlighted that it, along with others, had initially voted against Chandra's proposed repayment plan. However, the plan secured approval due to a majority vote from other financial creditors, accounting for 80.81%.
Union Bank of India echoed this sentiment, issuing a statement that they, along with other public sector undertakings like LIC Housing Finance and Canara Bank, had rejected the NCLT's resolution plan. Despite their opposition, the plan was approved by a majority vote from certain private creditors. Union Bank confirmed its immediate intention to challenge the NCLT's decision before the NCLAT.
HDFC Bank Also Opposed
Prior to these announcements, HDFC Bank had also declared its opposition to Subhash Chandra's resolution plan. The bank, India's largest private sector lender, stated it was considering an appeal against the NCLT order. HDFC Bank's admitted claim in the matter was 3.2% of the total stated amount, approximately ₹680 crore, inherited from its erstwhile parent company HDFC Ltd before their merger.
Subhash Chandra's Counter-Claims
Meanwhile, Subhash Chandra has publicly stated that the Essel Group has repaid around ₹43,000 crore of its total ₹45,000 crore debt. He called for an independent audit to examine the media-to-infrastructure conglomerate's debt, responding to what he termed "allegations and speculation" surrounding his family and the group's financial standing.
Chandra also disputed the ₹22,000 crore figure cited in the NCLT matter, asserting that the actual amount linked to objecting creditors was closer to ₹3,900 crore, stemming primarily from personal guarantees provided to certain lenders.