Mumbai, India – In a highly controversial Insolvency and Bankruptcy Code (IBC) outcome, Zee Media Group founder and former media baron Subhash Chandra has secured an order to settle his personal guarantee of ₹22,006.57 crore by offering to pay just ₹6.5 crore, forcing creditors, including top banks, to take a massive haircut of more than 99%. The National Company Law Tribunal (NCLT) New Delhi Bench, in a split verdict, approved the repayment plan based on the decision of 80.814% of creditors who voted in favour of Chandra’s offer.
The NCLT’s third member, Nilesh Sharma, delivered the final order after a difference of opinion arose between Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The court left the commercial decision to the Committee of Creditors (CoC), which approved the plan. The order excluded claims submitted by Anil Kumar on behalf of 960 individuals and Sunil Jain on behalf of 300 individuals from the final list of creditors, and directed the Resolution Professional to prepare a revised list and redistribute the repayment amount accordingly.
Creditors opposing the plan included Axis Bank, RBL Bank, IndusInd Bank, IDBI Trusteeship (for Franklin Templeton), LIC Housing Finance, and Union Bank of India, holding a collective vote share of 19.186%. Those supporting the plan included entities allegedly associated with Chandra, such as Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, and Lemonade Capital Advisors. HDFC Bank, which opposed the plan, raised concerns that these entities were associates of Chandra and that their vote share should not be counted.
The Resolution Professional argued that Chandra’s estate, in the event of bankruptcy, might not even cover the process costs, and that Chandra had offered to sell all his assets worth ₹6.5 crore for the repayment plan. However, creditors questioned Chandra’s sudden financial decline, pointing to net worth certificates from 2017 and 2018 valuing his assets at ₹40,000–45,000 crore. They argued that the repayment plan was unviable, with LIC Housing Finance stating that against its admitted claim of ₹1,322.39 crore, the proposed repayment was only ₹38.09 lakh.
The case involves personal guarantees given by Chandra for loans availed by Essel Group companies. With the NCLT approving the plan, Chandra has secured significant relief, but the principal borrowers remain liable to pay creditors. The decision is likely to be challenged, given the severe haircut imposed on leading banks and financial institutions.
