Banks Challenge NCLT Order on Subhash Chandra’s Debt Reduction

Several major lenders, including Union Bank of India (UK) Ltd, Canara Bank, and LIC Housing Finance Ltd, are set to challenge a National Company Law Tribunal (NCLT) order. This decision drastically reduced media baron Subhash Chandra’s repayment liability from over Rs.22,000 crore to just Rs.6.25 crore.

The NCLT’s approval of this personal insolvency resolution plan leaves the aggrieved banks recovering only 0.03 percent of their admitted dues. The case originated from Indiabulls Housing Finance Ltd, now Sammaan Capital, concerning a personal guarantee for loans to Chandra’s associated firms.

Lenders’ Opposition and Resolution Plan Approval

Public sector banks, specifically Union Bank of India (UK) Ltd, Canara Bank, and LIC Housing Finance, had explicitly rejected Chandra’s resolution plan. They urged the NCLT not to approve it, citing concerns over the minimal recovery.

• Canara Bank held a 1.60 percent voting share and opposed the Rs.6.25 crore repayment plan.
• Union Bank of India held a 0.76 percent voting share and also rejected the proposal.
• LIC Housing Finance, with a 6.09 percent voting share, similarly voted against the plan.
• Despite this opposition, the plan gained approval due to a majority vote of 80.81 percent from certain private creditors.

Canara Bank had additionally requested a forensic audit, but this was not permitted given their minority voting share. All these public financial institutions, alongside HDFC Bank, are now preparing to file appeals before the National Company Law Appellate Tribunal (NCLAT).

HDFC Bank, which was the first to announce its challenge, noted that its admitted claim represented only 3.2 percent of the total stated claim amount. This facility was inherited from HDFC Ltd.

Allegations of Media Orchestration Surface

In a separate development, Subhash Chandra publicly accused Mukesh Ambani of orchestrating negative media campaigns against him. Chandra alleged that an editor from Ambani’s media firms was instructed to attack him and urged Ambani to control his aide, Manoj Modi.

He further claimed that Ambani had previously attempted to destabilize his shares in the stock market. Reliance Industries, however, denied all allegations, expressing high regard for Chandra and wishing him well.