The National Company Law Tribunal (NCLT) has put a hold on its prior approval of a debt repayment plan for Subhash Chandra, the prominent media baron and founder of Zee Entertainment. The NCLT's special five-member bench issued notices to Chandra and the involved lenders in the Insolvency and Bankruptcy Code (IBC) case, which concerns a ₹6.5 crore repayment proposal against admitted claims exceeding ₹22,000 crore.
The decision to stay the previous order comes after a split verdict from a three-member NCLT bench on August 25. Judicial Member Nilesh Sharma had supported the repayment plan's approval, emphasizing that the required majority of creditors had voted in its favor, despite objections from some creditors regarding Chandra's financial affairs. However, other members held differing views, leading to the current situation where the special bench stated that "no majority view emerges" as per Section 419(5) of the Companies Act.
Massive Haircut and Creditor Approval
The controversial repayment plan offered ₹6.25 crore to creditors and an additional ₹25 lakh for process costs, starkly contrasting with the total admitted claims of ₹22,006.57 crore. This represents an extraordinary 99.97% haircut for the creditors. Despite the significant reduction, creditors holding 80.814% of the voting share had initially approved the plan.
Conditions Imposed and Claim Lapses
In its latest directive, the NCLT special bench has ordered Subhash Chandra, as the guarantor, not to alienate any of his properties, either directly or indirectly. This measure ensures that assets remain secured while the repayment case is re-examined.
The tribunal also highlighted lapses in the admission of claims from 960 individuals through Anil Kumar and 300 individuals through Sunil Jain, which were based solely on Chandra's verbal assurances. While Judicial Member Nilesh Sharma had previously noted that these unsupported claims should not have been admitted, he had concluded that this lapse did not fundamentally undermine the entire insolvency process at the time.
The issuance of notices to all parties involved signifies a renewed scrutiny of the debt resolution process, aiming to resolve the differences in judicial opinion and ensure a clear, legally sound path forward for the substantial claims against the media baron.