The National Company Law Tribunal on Tuesday approved a ₹6.5 crore payout from Zee owner Subash Chandra to settle ₹22,006 crore in credit.
Multiple creditors are to receive only 0.028 per cent of the original amount lent to the Essel Group founder. This is a haircut of approximately 99.97 per cent or ₹22,000 crore. A haircut is the permanent loss a lender accepts on a bad loan to settle the debt.
In 2022, Indiabulls Housing Finance Limited, now known as Sammaan Capital, filed an insolvency case against Chandra for failing to repay a loan of ₹170 crore given to Vivek Infracon. Chandra had stood as a personal guarantor for the loan.
The plea was admitted in 2024, and the NCLT opened the floor for other creditors to step forward and submit their claims. A total of 23 creditors came forward, and the debt ballooned to ₹22,006 crore. It was revealed that Chandra stood as a personal guarantor for massive loans taken out by various other Essel Group and Zee-linked entities.
On August 25, a third Judicial Member, Nilesh Sharma, approved a payout plan of ₹6.25 crore to creditors against claims of approximately ₹22,006 crore, after Judicial Member Ashok Kumar and Technical Member Reena Sinha Puri remained split on the decision.
Some creditors objected to the decision, even though the order was passed only because an 80.81 per cent majority agreed to the plan.
LIC Housing Finance had submitted a claim worth up to ₹1,322 crore and said that the proposed repayment would only settle ₹38 lakh of it.
The NCLT bench was divided because creditors questioned whether Chandra’s assets were verified. They noted that Chandra’s net worth was assessed at around ₹40,000 crore in 2018 while his submitted present net worth was around ₹31 crore.
Creditors also raised concerns about entities allegedly associated with Chandra participating in the voting process.
However, NCLT dismissed the argument, saying that these entities did not meet the exact definition of “associates” under Section 79(2)(g) of the IBC.
Fugitive Indian businessman Vijay Mallya celebrated the decision and posted on X, “If true, many congratulations to my friend Subhash. Banks and the Government have admitted to having recovered ₹14,100 from me against a Judgement debt of ₹6,203 crores. Many more borrowers have settled at a fraction. India Debt Resolution Justice, I presume. No media questions.”
