MUMBAI: With the National Company Law Tribunal this week clearing a repayment plan offering only Rs. 6.5 crore in a case concerning Zee Group’s Subhash Chandra’s personal guarantees for loans taken by his companies, HDFC Bank said it is exploring an appeal.Creditors filed claims of Rs. 22,006 crore against Subhash Chandra for the loans he backed, but the repayment plan approved by a majority of creditors and cleared by NCLT approves a 99.97% haircut — without impacting lender’s right to recover from the actual borrowers.Assenting creditors (80.8%) contested allegations of being related parties and argued that Rs. 6.5-crore plan offered a better outcome compared to pushing the personal guarantor into bankruptcy, since Chandra’s net worth according to the resolution professional was only Rs. 31.8 crore, of which Rs. 25 crore was his mortgaged house. Chandra has disputed the Rs. 22,000-crore liability, stating it reflected historical claims filed in 2022.
‘Was only a guarantor, did not borrow’
Chandra put objecting creditors’ claims at Rs 3,992 crore, of which Rs 620 crore was settled, with borrowing entities offering another Rs 1,063–1,113 crore. The remaining Rs 16,201 crore of assenting claims was also being addressed by principal borrowers. He said he was only a personal guarantor and had not himself borrowed, adding that most of the guarantees were provided by him after group companies defaulted as lenders and made “emotional appeals” for guarantees, saying otherwise their employees would lose their jobs.The assenting creditors said even after the settlement, principal borrowers (group companies) continued to remain on the hook.HDFC’s Rs 698 crore claim represented 3.2% of the sum. Other dissenters, accounting for around 15%, include Axis Bank, Canara Bank, RBL Bank, Union Bank UK, IDBI Trusteeship and LIC Housing Finance.LIC Housing Finance said the order does not affect borrowers’ corporate liabilities or its security.The claims arise from Chandra’s personal guarantees for borrowings by Vivek Infracon, Spirit Textiles, and Churu Enterprises, as well as mortgage-backed facilities for Essel Corporate Resources and Jayneer Infrapower.The dissenting lenders argued that assenting creditors Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, Lemonade Capital Advisors, and Corpcall Capital Advisors were related or associate entities and controlled 61.8% to 62% of voting rights, making them ineligible under Section 109(4)(b) of the IBC. They cited Veena’s control by Sushila Devi Goel, wife of Jawahar Goel, the personal guarantor’s brother, and links between partners of Lemonade and Corpcall and companies disclosed as related parties in Veena’s accounts.The 99.97% haircut headlines caught nationwide attention, with Congress general secretary Jairam Ramesh stating: “The National Company Law Tribunal has just approved a repayment plan of a noted businessman under which creditors will receive only Rs 6.5 crores against admitted claims of around Rs 22,006.57 crore. This is not just a haircut. It is actually a mundan and makes a complete mockery of the Insolvency and Bankruptcy Code, 2016.”In a post on X, Vijay Mallya said, “If true, many congratulations to my friend Subhash,” contrasting the outcome with his own case by claiming banks and the govt had recovered Rs 14,100 crore against a Rs 6,203 crore judgment debt while continuing to pursue him, signing off with “Indian Debt Resolution Justice”.
