PSU Lenders Fight Subhash Chandra’s Rs 6.5 Cr Repayment Plan
By Business Desk
Public sector lenders, including LIC Housing Finance, plan to appeal NCLT’s approval of Subhash Chandra’s Rs 6.5 crore repayment plan against Rs 22,000 crore claims.
Public sector lenders, including LIC Housing Finance, Canara Bank, and Union Bank of India, are set to challenge the National Company Law Tribunal’s (NCLT) recent approval of Essel Group Chairman Subhash Chandra’s repayment plan.
This plan proposes a settlement of Rs 6.5 crore against admitted creditor claims that exceed Rs 22,000 crore, a decision which these public sector entities had opposed during the proceedings.
Key Figures in the Repayment Dispute
- Proposed Repayment: Rs 6.5 crore
- Total Admitted Creditor Claims: Over Rs 22,000 crore
- Public Sector Lenders’ Voting Share: 8.45 percent
- Majority Financial Creditors’ Voting Share: 80.81 percent
- HDFC Bank’s Admitted Claim: 3.2 percent of its total claim
The NCLT’s approval stemmed from the majority votes cast by other financial creditors, who collectively held an 80.81 percent voting share in Chandra’s personal insolvency proceedings.
LIC Housing Finance confirmed its intention to immediately file an appeal before the National Company Law Appellate Tribunal (NCLAT), acting in concert with other public financial institutions.
Canara Bank also voiced its opposition to the repayment plan, which it specified as Rs 6.25 crore in its statement, and affirmed its commitment to challenge the NCLT order at the NCLAT. The bank further noted that its request for a forensic audit was not approved due to its minority voting share.
Similarly, Union Bank of India rejected the proposed repayment plan and formally opposed its approval before the NCLT. The bank attributed the plan’s passage to the majority vote of certain private creditors.
Private Sector Involvement and Forthcoming Appeals
Private lender HDFC Bank is also exploring an appeal against the NCLT order. The bank had previously opposed and voted against the resolution, particularly as only 3.2 percent of its total claim amount was admitted under the NCLT’s decision.
These collective appeals by both public and private lenders indicate a significant legal battle ahead, aiming to overturn the NCLT’s decision regarding Subhash Chandra’s debt resolution plan.