'Complete Mockery': Congress Slams Subhash Chandra's 0.028% NCLT Settlement Plan Social Media Reacts

(MENAFN- Live Mint) Congress has criticised a repayment plan involving Essel Group founder Subhash Chandra. Creditors may recover only a fraction of their admitted claims.

Essel Group owns Zee Media. Chandra is the chairman emeritus of Zee Entertainment. He founded Zee TV in 1992 and Zee News in 1999.

Congress leader Jairam Ramesh described the outcome as a financial sacrifice. He said creditors were not merely receiving a“haircut”. He compared the settlement with a“mundan”, or complete shaving of the head.

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Ramesh said the decision mocked the Insolvency and Bankruptcy Code, 2016.

“In finance terminology, when creditors are owed money, and the debtor repays only part of it, the difference expressed as a percentage is called a haircut,” he wrote on X.

“This is not just a haircut. It is actually a mundan and makes a complete mockery of the Insolvency and Bankruptcy Code, 2016,” he added.

The NCLT settlement plan allocates ₹6.25 crore among eligible creditors. Total admitted claims were around ₹22,006.57 crore.

This means creditors could recover around 0.028% of their original claims. The implied loss is nearly 99.97%, or almost ₹22,000 crore.

Social media users have reacted to the settlement amount.

One user wrote,“Mundan is definitely more apt. Not a laughing matter though. Farmers commit suicide over their debt issues, and goons are sent for recovery from ordinary defaulters, while dozens of rich bigwigs are gifted with a salon treatment.”

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“It is ridiculous. When a layperson misses a home loan EMI, the banks would go to the ends of the world to name and shame and reclaim the money, and here the same banks are happy to take almost a 100% haircut,” commented one of them.

“How about farmers? Are they eligible for this type of haircut?” asked one user.

One user commented,“Lenders are not taking a haircut. They are slicing their heads off and offering them on a platter to the borrower.”

“Injustice to every shareholder or LIC Housing Finance. Why the hell should they take a hit of ₹20,000 crore?” asked one user.

Subhash Chandra's settlement

Indiabulls Housing Finance started insolvency proceedings against Subhash Chandra in 2022. Chandra personally guaranteed a ₹170 crore loan to Vivek Infracon. Indiabulls approached the tribunal after that loan had become bad.

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Two tribunal members later disagreed about the repayment plan. Judicial Member Ashok Kumar Bhardwaj supported its approval. Technical Member Reena Sinha Puri found serious legal and procedural problems. Judicial Member Nilesh Sharma supported approval on 25 August, according to the Bar and Bench.

Several banks and financial institutions have opposed the proposal. They have questioned the extremely low recovery and the claim verification process. They have also challenged voting by entities allegedly connected with Chandra.

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