HDFC Bank, Union Bank of India, LIC Housing Finance, and Canara Bank are preparing to challenge the National Company Law Tribunal ruling in the ₹22,006-crore borrowing case by Zee Group companies, guaranteed by chairman Subhash Chandra. As reported by CNBC TV18, these lenders had opposed the repayment plan and are now immediately challenging the NCLT decision before the National Company Law Appellate Tribunal (NCLAT). An HDFC Bank spokesperson confirmed the lender's opposition, stating "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." Union Bank of India has now officially announced its intention to challenge the NCLT approval, with the bank stating it will challenge the order before the National Company Law Appellate Tribunal, according to a media statement released on Saturday. The bank clarified that it, along with other public-sector creditors like Canara Bank and LIC Housing Finance Ltd, had rejected the resolution plan and pleaded before NCLT for not approving it.
Subhash Chandra has issued a third statement on Sunday clarifying his personal guarantees and lender claims following social media posts over the past three days, with hashtags such as #PaiseVapasKaro gaining momentum. According to The Hindu BusinessLine, Chandra questioned HDFC's claims of ₹4,262 crore dues, stating that the HDFC Group has made claims without a valid personal guarantee. The media baron outlined that the HDFC Group has outstanding balances of ₹775 crore across 4 out of 5 accounts, with the statement including the remark "claims without valid personal guarantee." Similarly, he mentioned outstanding dues for multiple accounts of LIC Housing Finance at ₹1,322 crore, stating "he offered to settle. Part security available." Chandra's office noted that "amounts differ from the earlier press statement of ₹3,992 crore and ₹4,262 crore because some accounts were not taken as they neither voted for or against." The total outstanding dues to lenders now amount to ₹4,262 crore.
Dissenting lenders have alleged that five entities linked to Subhash Chandra's family together controlled 61.78% of the voting share and were instrumental in pushing through his personal insolvency resolution plan. According to a 144-page order of the National Company Law Tribunal (NCLT), these entities - Veena Investments Pvt Ltd, Direct Media Distribution Ventures Pvt Ltd, World Crest Advisors LLP, Lemonade Capital Advisors LLP and Corpcall Capital Advisors LLP - were associates or related parties of Chandra and should have been barred from voting on the repayment plan. The lenders contended that their votes helped the plan secure an overall 80.814% approval in the committee of creditors (CoC), with the repayment plan approved by tribunal member Nilesh Sharma after a split verdict between Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri.
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. As per The Economic Times, 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 dissenting lenders' objections. Government officials clarified that it was incorrect to conclude that banks have taken a 99.97% haircut on over ₹22,000 crore of loans considering the ₹6.25 crore payment by Chandra. "Subhash Chandra did not personally borrow ₹22,000 crore. The figure represents the total claims filed in the proceedings and does not reflect the current status of the matter," said one of the officials. Only ₹2,574 crore of claims relate to loans where Chandra's personal guarantee was given at the time of original borrowing, with most other guarantees provided later as additional security.
Subhash Chandra has issued a third statement on Sunday clarifying his personal guarantees and lender claims, stating he has discussed the matter with borrowers and received an assurance to settle the ₹4,262 crore after reconciliation with lenders. According to The Hindu BusinessLine, Chandra stated "Subhash Chandra hopes that the lenders will also engage with the borrowers, reconcile the outstanding accounts and recover their dues. He also hopes that those who supported #PaisaWapasKaro, as well as others commenting on social media will be satisfied with this." The media baron described the plan as allowing him to repay an amount of ₹6.5 crore against the admitted claims of over ₹22,000 crore, which he described as value of the total Personal Guarantees he had signed. HDFC is one of the foremost lenders to consider an appeal before the NCLAT against the NCLT order, with LIC Housing Finance following soon after along with Canara Bank and Union Bank whose outstanding balances are ₹348 crore and ₹164 crore respectively.
The tribunal's judicial member Nilesh Sharma approved the plan under Section 114 of the Insolvency and Bankruptcy Code, with the approval translating into a recovery of around 0.03% and a haircut of nearly 99.97% for lenders. As per The Economic Times, LIC Housing Finance's case was particularly severe, with its ₹1,322.39 crore admitted claim receiving only ₹38.09 lakh in repayment, representing about 0.028% of its admitted dues. The tribunal noted that objecting creditors together held less than 20% of the voting share, while the plan had received approval from creditors representing 80.81% of the voting share. Sharma rejected objections from dissenting creditors, led by LIC Housing Finance, which had termed the proposed payout "unviable and unlawful." The NCLT has directed the resolution professional to prepare the revised and final list of creditors after giving effect to exclusions ordered by the tribunal and take consequential steps for redistribution of the approved repayment plan value.
The 99.97% haircut headlines have caught nationwide attention, with Congress general secretary Jairam Ramesh stating: "The National Company Law Tribunal has just approved a repayment plan of a noted businessman under which creditors will receive only ₹6.5 crores against admitted claims of around ₹22,006.57 crore. This is not just a haircut. It is actually a mundan and makes a complete mockery of the Insolvency and Bankruptcy Code, 2016." In a post on X, Vijay Mallya said, "If true, many congratulations to my friend Subhash," contrasting the outcome with his own case by claiming banks and the government had recovered ₹14,100 crore against a ₹6,203 crore judgment debt while continuing to pursue him, signing off with "Indian Debt Resolution Justice." HDFC's ₹698 crore claim represented 3.2% of the sum, while other dissenters, accounting for around 15%, include Axis Bank, Canara Bank, RBL Bank, Union Bank UK, IDBI Trusteeship and LIC Housing Finance. The assenting creditors said even after the settlement, principal borrowers (group companies) continued to remain on the hook.
