5 days ago
NCLT Approves Repayment Plan Yielding Lenders Just 0.03% Recovery
Subhash Chandra’s insolvency case involves money that lenders were supposed to recover.
Their total admitted claims were ₹22,006 crore.
The repayment plan approved by the NCLT gives them only ₹6.5 crore.
This means lenders lose almost all of the money they claimed.
The loss is called a 99.97% haircut.
LIC Housing Finance Limited would recover only about ₹38 lakh from a claim of ₹1,322.39 crore.
Some parties argued that such a small repayment should not have been approved.
Experts said the result could hurt trust in financial institutions and raised questions about transparency.
Lenders have admitted claims totaling ₹22,006 crore in Subhash Chandra’s insolvency proceedings.
The NCLT-approved repayment plan provides lenders only ₹6.5 crore.
The resulting haircut is 99.97%, equivalent to an overall recovery of about 0.03%.
LIC Housing Finance Limited is owed ₹1,322.39 crore but would receive ₹38.09 lakh.
Experts called the outcome distressing and raised concerns about transparency, credibility and public-money recovery.
- Who
- Lenders including LIC Housing Finance Limited are involved in insolvency proceedings concerning Subhash Chandra.
- What
- The NCLT approved a repayment plan under which lenders recover ₹6.5 crore from ₹22,006 crore in admitted claims.
- Where
- The case was heard by the National Company Law Tribunal; the report is datelined Mumbai.
- When
- Why
- The repayment plan determines recoveries in the insolvency proceedings, although the report does not state why the recovery is so low.
NCLT-Approved Repayment Plan
Objectors and Critical Experts
Approval of the recovery
NCLT-Approved Repayment Plan
The National Company Law Tribunal approved the repayment plan, which provides lenders ₹6.5 crore against admitted claims of ₹22,006 crore.
Objectors and Critical Experts
It was argued that an extremely small repayment, including LIC Housing Finance Limited’s proposed ₹38.09 lakh recovery, should not have received tribunal approval.
Institutional credibility
NCLT-Approved Repayment Plan
The tribunal-approved plan establishes the outcome of the insolvency proceedings described in the report.
Objectors and Critical Experts
Experts called the result disturbing and distressing, warning that inadequate transparency could erode trust and credibility in institutions.
Key facts
- Total admitted claims
- ₹22,006 crore
- Amount lenders will recover
- ₹6.5 crore
- Haircut
- 99.97%
- Overall recovery
- About 0.03%
- LIC Housing Finance claim
- ₹1,322.39 crore
- LIC Housing Finance proposed recovery
- ₹38.09 lakh
- Key concern
- Experts questioned transparency, credibility and recovery of public money.
Quotes
Anonymous financial analyst
A financial analyst commenting anonymously on the insolvency outcome
“This is the most haircut seen in an NCLT case I guess”
thehansindia.com
Hariharan MV
Former SBI Treasury Head commenting on institutional credibility and trust
“This engenders the warranted credibility. Erosion of trust, is the single most critical challenge facing institutions today, the world over.”
thehansindia.com
Sources
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