‘Utter mockery’: Congress slams NCLT’s 0.028% settlement plan Subhash Chandra; social media react | Today’s news
The Congress criticized the installment plan involving Essel Group founder Subhash Chandra. Creditors can only recover a fraction of their admitted claims.
Essel Group owns Zee Media. Chandra is Chairman Emeritus of Zee Entertainment. He founded Zee TV in 1992 and Zee News in 1999.
Congress president Jairam Ramesh called the result a financial sacrifice. He said lenders didn’t just get a “haircut.” He compared the settlement to a “mundane” or complete head shave.
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The total claims awarded in the insolvency case of Subhash Chandra were around ₹22,006.57 crore.
The Congress party slammed the repayment plan as a “complete mockery” of the Insolvency and Bankruptcy Act 2016 and claimed that lenders faced a 99.97% cut, which they described as “mundane”.
The NCLT justified its approval on the grounds that rejecting the plan could result in creditors recovering even less if Chandra was forced into bankruptcy as his personal assets were found to be worth substantially less than the recovery amount offered.
A reduction of 99.97% means that creditors will recover only about 0.03% of their total claims, which is about three payments for every ₹100 owed to them.
Creditors objected to the repayment proposal, calling it “unviable and illegal”, and questioned the legitimacy of votes from related entities that supported the plan, as well as the lack of a forensic investigation into Chandra’s assets.
Read also | NCLT approves Subhash Chandra’s ₹6.5 cr installment plan against ₹22,007 cr claims
Ramesh said the decision made a mockery of the Insolvency and Bankruptcy Act 2016.
“In financial terminology, when money is owed to lenders and the borrower pays back only part of it, the difference, expressed as a percentage, is called a deduction,” he wrote on X.
“This is not just a haircut. It is actually commonplace and makes a complete mockery of the Insolvency and Bankruptcy Act 2016,” he added.
The NCLT settlement plan allocates ₹6.25 crore among eligible creditors. The total number of admitted claims was approx ₹22,006.57 million crowns.
This means that creditors could recover approximately 0.028% of their original claims. The implied loss is almost 99.97%, or almost ₹22,000 million crowns.
Social media users reacted to the settlement amount.
One user wrote: “Mundan is definitely more accurate. Although it’s not funny. Farmers commit suicide due to debt problems and villains are sent to collect from ordinary defaulters while dozens of rich bigwigs are gifted with salon treatments.”
Read also | NCLT pulls up SpiceJet for ‘wasting court’s time’
“It’s ridiculous. When a layman misses a home loan EMI, the banks would go to the ends of the earth to name and shame and demand the money back, and here the same banks are happy to give almost a 100% haircut,” commented one.
“What about farmers? Are they entitled to this type of haircut?” one user asked.
One user commented: “Lenders don’t cut their hair. They cut off their heads and offer them on a platter to the borrower.”
“Injustice to every shareholder or LIC Housing Finance. Why the hell should they strike.” ₹20,000 crore?” asked one user.
Subhash Chandra Settlement
Indiabulls Housing Finance started insolvency proceedings against Subhash Chandra in 2022. Chandra personally guaranteed ₹Loan of 170 million crowns to Vivek Infracon. Indianbulls approached the tribunal after this loan turned bad.
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The two members of the tribunal later disagreed on the repayment plan. Justice Ashok Kumar Bhardwaj supported its approval. Technical member Reena Sinha Puri identified serious legal and procedural problems. Justice Nilesh Sharma supported the approval on August 25, according to the Bar and Bench.
Several banks and financial institutions opposed the proposal. They questioned the extremely low return and claim verification process. They also attacked the votes of entities allegedly associated with Chandra.
