Zee founder Subhash Chandra has said he has Rs 6.5 crore left and is meeting his expenses through rental income from a partly leased residential property, as his personal insolvency case remains at the centre of a row over a widely reported 99.97% haircut on creditor claims.
Speaking on Friday, Chandra said he would have to pay his remaining Rs 6.5 crore under the plan and insisted that he had no regrets about his financial circumstances.
“Today, I am speaking to you normally, even laughing and smiling. I am not speaking like someone who has lost everything. Whatever remaining Rs 6.5 crore I have, I will now have to pay that as well under this plan. I have a small residential house, part of which I have rented out. I am managing my expenses with the income from that. I have no regrets, friends,” he said.
The remarks came after the National Company Law Tribunal approved a repayment plan under which Chandra will pay Rs 6.5 crore — Rs 6.25 crore to creditors and Rs 25 lakh towards insolvency process costs — against admitted claims of Rs 22,006.57 crore. The resulting recovery translates to a reported 99.97% reduction in the admitted claims.
Why the 99.97% haircut figure is under scrutiny
The headline figure, however, does not mean banks have simply written off Rs 22,006 crore of loans that Chandra personally borrowed.
The Rs 22,006.57 crore represents claims admitted against Chandra in his capacity as a personal guarantor for loans taken by several Essel/Zee-linked companies. The underlying corporate borrowers remain liable for their debts, and creditors retain rights to recover dues from those companies and their available assets.
Government sources have said the widely reported 99.97% haircut figure is therefore misleading if interpreted as a 99.97% loss on Rs 22,000 crore of loans. The distinction is between Chandra's personal liability as guarantor and the broader debt of the companies for which he provided guarantees.
Sources cited in the background to the case said about Rs 2,574 crore of the admitted claims relate to loans where Chandra's guarantee was given when the loans were originally taken, while most of the remaining guarantees were furnished later as additional security.
Chandra disputes Rs 22,000 crore claim
Chandra has also challenged the size of the claim attributed to him.
He has said the total claim against him as a personal guarantor in the insolvency proceedings is Rs 3,992 crore, rather than Rs 22,000 crore, and has maintained that he did not borrow money from any lender.
Of that amount, Chandra said Rs 620 crore had already been settled, while another Rs 1,063 crore had been offered by the borrowing entities.
He has also said that the borrowing entities for which he provided personal guarantees have repaid Rs 43,000 crore to lenders to date and have assured that any remaining amount would be settled.
His Friday remarks added a personal-finances dimension to the dispute, with Chandra saying his small residential property, partly rented out, is generating the income he uses to meet his expenses.
Lenders oppose NCLT plan
The NCLT plan has faced opposition from dissenting creditors led by LIC Housing Finance, which argued that the proposed recovery was “unviable and unlawful”. It had pointed to admitted claims of approximately Rs 22,006.57 crore against a proposed Rs 6.25 crore payment to creditors and Rs 25 lakh towards process costs.
HDFC Bank also voted against the resolution and is considering an appeal against the NCLT order.
The tribunal approved the plan after its original two-member bench delivered a split verdict and the matter was referred to judicial member Nilesh Sharma as a third member. Sharma held that the Resolution Professional's valuation showed Chandra's personal estate was worth significantly less than the amount offered under the plan, and that rejecting the plan could leave dissenting creditors worse off because Chandra would otherwise face bankruptcy.
The matter will now return to the original division bench for a formal order reflecting the majority view.
Separately, the Reliance Group on Friday rejected remarks made by Chandra, calling them “baseless” and denying allegations and insinuations against media entities belonging to the group.
“We strongly deny the allegations and insinuations against the media entities that are a part of the Reliance Group. Our media brands have never been used to attack anyone, nor will they ever be,” a Reliance spokesperson said.
The group said it was “dismayed” by Chandra's remarks but added that it held him “in high regard as a businessman and entrepreneur” and wished him well.
