Zee Entertainment Enterprises Ltd (ZEEL) shares dropped 9.60% to ₹91.80 on Monday, extending their decline for the fourth consecutive session as reports emerged that three major lenders plan to challenge the approval of Essel Group founder Subhash Chandra's repayment plan. The stock is down 12.40% in four sessions, coming under pressure after reports said Canara Bank, Union Bank of India and LIC Housing Finance will approach the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal (NCLT)'s order approving the plan. As per Business Standard, the stock came under heavy selling pressure, with heavy trading volumes of around 58 million shares changing hands as investors reacted to the escalating legal challenges.
During an 18-minute Instagram interaction attended by around 560 people at its peak, Zee founder Subhash Chandra largely shifted focus away from recent allegations against Mukesh Ambani and instead defended his personal insolvency resolution plan. According to Livemint, Chandra said he met 85 borrowers linked to the Essel Group on Sunday who had agreed to repay their outstanding obligations to lenders, with outstanding bank debt of about ₹990 crore. Chandra clarified that the ₹22,006 crore figure had been widely misunderstood as it represented claims arising from personal guarantees he provided for loans taken by companies associated with the Essel Group, rather than money he had personally borrowed. He acknowledged providing guarantees for 18 to 20 borrowing entities and said he was merely a guarantor, with only one or two entities linked to his family.
The National Company Law Tribunal (NCLT) has approved a repayment plan in Zee Group founder Subhash Chandra's personal insolvency case, allowing him to settle ₹22,006.57 crore in admitted claims by paying just ₹6.25 crore. According to The Economic Times, the Delhi bench approved the plan after a split verdict between two members was referred to judicial member Nilesh Sharma, who cleared it under Section 114 of the Insolvency and Bankruptcy Code (IBC). The plan will distribute ₹6.25 crore to creditors with ₹25 lakh allocated towards insolvency process costs. The figures have drawn attention because the amount available for creditors represents about 0.03% of the admitted claims, implying a haircut of nearly 99.97% on claims against Chandra in the personal insolvency process. The case originated from a personal guarantee Chandra had provided for a ₹170 crore loan extended to Vivek Infracon, which subsequently turned bad, with Indiabulls Housing Finance (now renamed Sammaan Capital) approaching the NCLT in 2022 and the tribunal admitting the insolvency plea in April 2024.
Dissenting lenders, including LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank and RBL Bank, together holding close to 20% of the CoC's voting rights, have raised serious questions about the voting process and creditor eligibility. According to lenders, five entities (Veena Investments, Direct Media Distribution Ventures, World Crest Advisors LLP, Lemonade Capital Advisors LLP, and Corpcal Capital Advisers LLP) linked to Essel Group founder Subhash Chandra's family together controlled 61.78% of the voting share and backed his proposal. These entities helped secure 80.81% approval in the committee of creditors, with Veena Investments having a 5% vote controlled by Chandra's sister-in-law Sushila Devi Goel. The dissenting lenders argued that these five entities or related parties of Subhash Chandra should have been barred from voting on the repayment plan, as they fell within the definition of 'associates' under the Insolvency and Bankruptcy Code (IBC). LIC Housing Finance, which will recover just ₹38 lakh against an admitted claim of ₹1,322 crore, has stated it is filing an appeal in NCLAT against the NCLT order, while Canara Bank, Union Bank of India are also among the lenders planning to challenge the settlement. HDFC Bank had said it was exploring an appeal, and RBL Bank has also joined the opposition.
Creditors, including LIC Housing and Banks, on Monday approached the National Company Law Appellate Tribunal (NCLAT) challenging the National Company Law Tribunal (NCLT)'s approval of Zee group founder Subhash Chandra's repayment plan. Solicitor General Tushar Mehta, appearing for the creditors, urged the appellate tribunal to hear the matter urgently. According to Moneycontrol, Mehta, who also represented Canara Bank and Union Bank, said that if the order is allowed to continue, it will "defeat the very purpose of the Insolvency & Bankruptcy Code" and requested that the bench hear it at 2 PM. However, the NCLAT agreed to list the matter for hearing on Tuesday, indicating the urgency with which the creditors are pursuing their challenge to the settlement approved by the NCLT. In their plea, the banks have argued that the approved plan results in a "haircut" of virtually 99% for lenders and that the order could affect the "intent and purpose" of the Insolvency and Bankruptcy Code (IBC). Canara Bank, Union Bank of India, and LIC Housing Finance had opposed the repayment plan before the NCLT, with Canara Bank also seeking a forensic audit but saying this could not be allowed given its minority voting share. The lenders have sought an urgent hearing and are likely to press for a stay on the NCLT order, representing a significant escalation in the legal proceedings as they seek to overturn the tribunal's decision that allowed Chandra to settle his massive debt obligations for just ₹6.25 crore against admitted claims of ₹22,006.57 crore.
