1 week ago
NCLT Approves Subhash Chandra’s ₹6.5-Crore Repayment Plan
Subhash Chandra, the founder of Zee Group, owes creditors a very large amount of money.
A tribunal approved his proposal to pay them ₹6.5 crore.
The creditors’ admitted claims total about ₹22,006.57 crore.
This means creditors would recover only about 0.03% of what they are owed.
Some creditors voted for the plan, while several large banks voted against it.
Opposing creditors said some supporting votes came from companies connected to Chandra.
They also wanted a detailed investigation into how his wealth changed over time.
The tribunal said a forensic audit was not required by the insolvency law.
Chandra’s office said the matter remains under judicial scrutiny and that no final conclusions should be drawn yet.
The NCLT approved Subhash Chandra’s plan to pay ₹6.5 crore against admitted claims of ₹22,006.57 crore.
The plan would give creditors a recovery of approximately 0.03% of their admitted dues.
The plan received 80.814% creditor support in a November 2024 vote, though several major banks opposed it.
Objecting creditors questioned related-party votes and the lack of a forensic investigation into Chandra’s assets.
The approval could allow Chandra to exit personal insolvency after implementing the plan, subject to further judicial directions.
- Who
- Subhash Chandra, Zee Group’s founder and chairman, and his creditors, including banks and financial institutions.
- What
- The National Company Law Tribunal approved Chandra’s repayment plan to pay ₹6.5 crore against admitted creditor claims of ₹22,006.57 crore.
- Where
- The decision was issued by a special bench of the National Company Law Tribunal’s Delhi bench; the report is datelined Mumbai.
- When
- The third-member approval was issued on Tuesday; creditors voted on the plan in November 2024, and the insolvency petition was admitted in April 2024.
- Why
- The plan was considered as part of Chandra’s personal insolvency process after he acted as guarantor for a ₹170-crore loan to Vivek Infracon that defaulted.
Objecting Creditors
Plan Approval Position
Extremely low recovery
Objecting Creditors
Creditors argued that the plan would return only a very small fraction of their admitted dues, including about 0.028% of LIC Housing Finance’s claim.
Plan Approval Position
The plan received 80.814% support from voting creditors and was approved by the tribunal’s deciding judicial member.
Related-party voting
Objecting Creditors
Objecting creditors alleged that several entities supporting the plan were associates of Chandra and that their votes should not count toward approval.
Plan Approval Position
The plan’s reported voting record included support from World Crest Advisors, Lemonade Capital Advisors, Corpcall Capital Advisors and Veena Investments.
Forensic investigation
Objecting Creditors
Creditors sought a forensic investigation, citing the difference between Chandra’s historical net worth—reported at ₹40,562 crore in 2018—and his disclosed current net worth of about ₹31.79 crore.
Plan Approval Position
Nilesh Sharma acknowledged the difference but held that the Insolvency and Bankruptcy Code does not make a forensic audit a mandatory precondition for considering a repayment plan.
Key facts
- Proposed repayment
- ₹6.5 crore
- Admitted creditor claims
- Approximately ₹22,006.57 crore
- Estimated recovery
- Around 0.03% of admitted dues
- Creditor vote
- 80.814% of voting share supported the plan in November 2024
- LIC Housing Finance claim
- ₹1,322.39 crore, with an expected recovery of ₹38,09,294
- Plan approval
- Third judicial member Nilesh Sharma approved the plan after the original two bench members disagreed
- Relevant law
- Sections 114 and 115 of the Insolvency and Bankruptcy Code
- Underlying loan
- A ₹170-crore loan to Vivek Infracon for which Chandra was personal guarantor
Quotes
National Company Law Tribunal
The insolvency tribunal’s order
“We would not like to offer any comments on this matter since the matter is under judicial scrutiny. The matter will go through the due process in the judicial system. We advise and request you to not arrive at any inference before the final order is issued.”
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“no provision of the Code or the applicable Regulations has been brought to the notice of this Tribunal which makes such an exercise a mandatory precondition for consideration of a repayment plan under Section 114”
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Objecting creditors
Creditors opposing Chandra’s repayment plan
“Veena Investments Pvt. Ltd., Direct Media Distribution Ventures Pvt. Ltd., World Crest Advisors LLP, Lemonade Capital Advisors LLP and Corpcall Capital Advisors LLP fall in the category of associates of the debtor and their vote share cannot be taken into account while counting the vote share in favour of the Repayment Plan”
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Sources
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