The settlement plan approved on Tuesday included a payment of ₹1,494 crore by principal borrowers and a meagre ₹6.25 crore by Chandra as personal guarantor to the ₹22,006-crore borrowing.
The committee of creditors approved the plan, with 80.8% creditors voting in its favour. Several lenders, such as state-owned LIC Housing Finance (LICHFL), HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank, had opposed the payment plan.
ET BureauLICHFL has decided to challenge the ruling at the National Company Law Appellate Tribunal and also plans to seek intervention through the National Housing Bank (NHB), an apex development finance institution for the housing sector in India, people aware of the development said.
“HDFC Bank had opposed and voted against this resolution, which was approved by the majority. The bank is exploring filing an appeal at the National Company Law Appellate Tribunal,” said the lender in a statement.
Not a Personal BorrowingAs a dissenting creditor, LICHFL argued that against “the admitted claim of approximately Rs 22,006 crore, the repayment plan proposed payment of only Rs 6.25 crore to the creditors.”
Government officials said it was incorrect to conclude that banks have taken a 99.97% haircut on over Rs 22,000 crore of loans considering the Rs 6.25 crore payment by Chandra.
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“Subhash Chandra did not personally borrow Rs 22,000 crore. The figure represents the total claims admitted against him as a personal guarantor for debt borrowed by several Essel/Zee-linked companies,” said one of the officials. “The principal borrowers remain separately liable. The repayment plan envisages around Rs 1,494 crore of payments by the principal borrowers, in addition to Rs 6.25 crore from Chandra personally.”
Additionally, only Rs 2,574 crore of claims relate to loans where Chandra’s personal guarantee was given at the time of the original borrowing. “Most other guarantees were provided later as additional security,” said the official.
On Tuesday, the Delhi bench of the tribunal approved the repayment plan submitted by Chandra. The tribunal’s judicial member, Nilesh Sharma, acting as the third member, approved the plan under Section 114 of the Insolvency and Bankruptcy Code and rejected the dissenting lenders’ objections.