Source : INDIA TODAY NEWS
A Rs 22,000-crore mountain of claims has been settled down to a Rs 6.25-crore payout for Essel Group and Zee founder Subhash Chandra, with a majority of his creditors voting to go ahead with the proposed repayment plan.
The numbers raise an obvious question: who agreed to take such a steep haircut, and why? The NCLT (National Company Law Tribunal) order accepting the repayment plan shows that creditors representing 80.814% of the votes cast backed Chandra’s plan, while others, including HDFC Bank and LIC Housing Finance, voted against it. Some creditors chose not to vote.
The Rs 6.25-crore payment is Chandra’s proposed personal contribution under the plan. The roughly Rs 22,006.57 crore figure represents claims admitted against him in insolvency proceedings that arose largely from personal guarantees he had given for loans taken by companies associated with the Essel Group.
advertisement
The voting details are contained in the National Company Law Tribunal’s (NCLT) 144-page order pronounced on August 25, 2026, in the insolvency proceedings involving Chandra. The order reproduces the voting record for Item B3, which was the approval of the Repayment Plan.
The voting window closed on November 1, 2024, and the plan received 80.814% approval based on the votes cast.
But there is an important distinction behind that 80.814% figure: 77.48% of the total voting share voted in favour, 18.42% voted against and creditors representing 4.10% did not vote. Since the 4.10% abstention is excluded when calculating the votes cast, the favourable vote works out to 80.814%.
WHO VOTED IN FAVOUR?
Ten creditors or entities voted in favour of Chandra’s repayment plan.
World Crest Advisors had the largest voting share at 28.49%, followed by Lemonade Capital Advisors LLP at 16.85%. Catalyst Trusteeship (CINDA FPI) accounted for 11.85%, while Corpcall Capital Advisors LLP had 10.30%.
Veena Investments Private Limited had a 4.99% voting share, followed by Indiabulls Housing Finance Limited at 1.98%. Direct Media Distribution Ventures Pvt Ltd accounted for 1.15%, Kautilya Traders Pvt Ltd 1.02%, Anil Kumar 0.67% and Sunil Jain 0.18%.
Together, these 10 favourable votes represented 77.48% of the total voting share.
The NCLT order records the complete voting table, including the votes of each creditor.
The voting pattern is significant because the five largest supporters — World Crest Advisors, Lemonade Capital Advisors, Catalyst Trusteeship (CINDA FPI), Corpcall Capital Advisors and Veena Investments — together accounted for 72.48% of the total voting share.
Several of these creditors had faced objections from dissenting lenders, who argued that they were associates of Chandra and should not have been allowed to vote.
The NCLT, however, rejected that challenge. The Third Member held that the objecting creditors had failed to establish that Veena Investments, Direct Media Distribution Ventures, World Crest Advisors, Lemonade Capital Advisors and Corpcall Capital Advisors met the statutory definition of an “associate” under the Insolvency and Bankruptcy Code. Their participation and voting rights therefore could not be treated as legally impermissible.
WHO VOTED AGAINST THE PLAN?
Seven creditors voted against the repayment plan.
LIC Housing Finance had the largest voting share among the dissenting creditors at 6.09%. It was followed by IDBI Trusteeship Services, representing the Franklin Templeton interest, at 3.36%; HDFC Bank at 3.17%; Axis Bank at 2.86%; Canara Bank at 1.60%; Union Bank of India (UK) Ltd at 0.76%; and RBL Bank at 0.55%.
Together, these creditors represented 18.42% of the total voting share.
Their objection was centred largely on the size and viability of the repayment.
LIC Housing Finance, for instance, had an admitted claim of Rs 1,322.39 crore, but the repayment proposed for it was only Rs 38.09 lakh — around 0.028% of its admitted dues. The lender argued that such a negligible repayment should not be approved.
The dissenting creditors also raised broader concerns about the process, including the admission of certain claims, the participation of entities they considered associates of Chandra, the lack of a forensic audit and the manner in which the repayment plan and voting process were conducted.
Six creditor entries, together representing 4.10% of the voting share, did not vote on the repayment plan.
These included IDBI Trusteeship Services representing the Edelweiss Fund, with a 2.60% voting share; IndusInd Bank with 1.11%; Catalyst Trusteeship representing HDFC Asset Management at 0.06%; and three separate Axis Trustee Services entries with voting shares of 0.18%, 0.11% and 0.04%.
The NCLT order records these six entries as “Did not vote”.
This 4.10% is important because it explains why the final approval number was 80.814%, rather than 77.48%.
In simple terms, out of the entire voting share:
77.48% voted in favour
18.42% voted against
4.10% did not vote
Once the 4.10% that did not vote is removed, the votes actually cast amounted to 95.90%. The 77.48% favourable vote therefore translates into 80.814% of votes cast.
WHY WAS THERE A RS 22,000 CRORE CLAIM AGAINST CHANDRA?
The Rs 22,006.57 crore figure can be misleading if read as Chandra’s personal borrowing.
According to government officials cited by The Economic Times, Chandra did not personally borrow Rs 22,000 crore. The amount represents claims admitted against him in his capacity as a personal guarantor for debt borrowed by several Essel/Zee-linked companies.
The principal borrowers remain separately liable for their borrowings. Under the repayment plan, they are expected to make payments of around Rs 1,494 crore, while Chandra’s personal contribution is Rs 6.25 crore.
ET also reported that only around Rs 2,574 crore of the claims related to loans for which Chandra had provided a personal guarantee at the time of the original borrowing; most of the other guarantees were subsequently provided as additional security.
That is why describing the case simply as Chandra having personally borrowed Rs 22,000 crore would be inaccurate.
CHANDRA WAS A PERSONAL GUARANTOR
The office of Zee founder Subhash Chandra on Thursday clarified that the widely reported Rs 22,000-crore figure in his insolvency case before the National Company Law Tribunal (NCLT) refers to claims against him as a personal guarantor and not money he personally borrowed from lenders.
Chandra had given personal guarantees for loans taken by companies associated with the wider Essel Group. The guarantees eventually exposed him to claims running into around Rs 22,000 crore when the underlying corporate borrowers defaulted on their obligations.
The clarification comes amid renewed attention on the NCLT’s approval of a repayment plan under which Chandra is to pay Rs 6.25 crore, even though claims of around Rs 22,006.57 crore were admitted in the insolvency proceedings.
According to the clarification issued by Chandra’s office, he did not borrow the Rs 22,000 crore in his personal capacity. Instead, he had provided personal guarantees for loans taken by companies that, according to his office, were associated with entities that “remotely fell under the banner of Essel Group”.
WHY DID NCLT APPROVE THE PLAN?
The NCLT’s reasoning went beyond the headline difference between Rs 22,006 crore of claims and Rs 6.25 crore of personal repayment.
The tribunal considered the value of Chandra’s personal estate and the likely recovery available to creditors if the repayment plan was rejected.
The order notes that the resolution professional’s valuation showed Chandra’s personal estate was worth significantly less than the amount offered under the plan. The tribunal also reasoned that rejecting the plan could push Chandra into bankruptcy, without necessarily giving creditors a better recovery.
If the plan succeeded in resolving his insolvency and allowing him to regain financial stability, the NCLT said, creditors could potentially have a better chance of recovering dues from the principal borrowers.
The tribunal also stressed that its role was not to substitute its own commercial judgment for that of the creditors or decide whether the settlement amount was commercially adequate, provided the decision operated within the statutory framework.
The voting result is ultimately what allowed the repayment plan to clear the creditor threshold, but the NCLT’s August 25 order also made changes to the creditor list.
The tribunal found a specific deficiency in claims submitted through Anil Kumar and Sunil Jain on behalf of 960 and 300 individuals respectively. It directed that these claims be excluded from the final list of creditors and that the corresponding repayment amount be redistributed among the remaining eligible creditors.
At the same time, the tribunal did not accept the broader argument that the five entities accused of being associates had been improperly allowed to vote. It held that there was insufficient evidence to establish the statutory test required to disqualify them.
That leaves the repayment plan approved, but with dissenting lenders now preparing to challenge the decision.
– Ends
SOURCE :- TIMES OF INDIA
