Big haircut: Subhash Chandra says it’s against Rs Rs 3,992 crore

NEW DELHI: After a major controversy erupted over the National Company Law Tribunal (NCLT) approving Essel Group chairman Subhash Chandra’s Rs 6.5-crore repayment plan against admitted creditor claims of Rs 22,006 crore, the media baron on Thursday said that the claims against him as a personal guarantor were just Rs 3,992 crore.

In a statement, Chandra said he had not personally borrowed money from any lender and was only a personal guarantor for the loans raised by Vivek Infracon, Spirit Textiles and Churu Enterprises.

Chandra further said that Rs 620 crore of these claims had already been settled, while the borrowing entities had offered to pay Rs 1,113 crore to multiple lenders. Discussions are on, he said.

On Tuesday, the NCLT’s Delhi Bench had approved the repayment plan despite objections from financial creditors over the size of the proposed recovery, the conduct of the resolution professional and the participation of entities alleged to be associated with Chandra.

The repayment plan was approved by 80.814% of the creditors. However, Axis Bank, HDFC Bank, Canara Bank, LIC Housing Finance and some other lenders voted against it.

Creditors opposing the plan argued that the proposed recovery amounted to over 99% haircut.

LIC Housing Finance, whose admitted claim was Rs 1,322 crore, said the proposed repayment to it was only Rs 38.09 lakh.

The dissenting creditors also argued that five of the assenting creditors—Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, Lemonade Capital Advisors and Corpcall Capital Advisors—were associates or related parties of Chandra and together accounted for 61.78% of the voting share. They contended these entities should not have been allowed to vote.

Chandra’s side argued his personal estate had limited value. The repayment plan proposed using proceeds from the sale of a few of his assets to generate Rs 6.5 crore.

The tribunal held that its role was to examine whether the plan complied with the law and whether there was any statutory infirmity warranting its rejection.