Creditors object repayment plan of ZEEL Founder Subhash Chandra
Creditors claim ZEEL founder's proposed repayment is far below actual liabilities and that the committee of creditors largely comprised Chandra's proxies.
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Banks and financial institutions have raised strong objections before the National Company Law Tribunal (NCLT) against a repayment plan submitted by the Resolution Professional for Zee Entertainment Enterprises Limited (ZEEL) founder Subhash Chandra.
The creditors claimed that the proposed amounts to be repaid are "disproportionately low" and that the committee of creditors largely comprised Chandra's proxies.
Senior Advocate Abhinav Vashisht, appearing for one of the objectors, argued that Chandra's assets were allegedly undervalued. "In 2017, Subhash Chandra's worth was in thousands of crores; today they say it is only Rs 31 crore," he said according to a report.
"Our outstanding is in hundreds of crores. They have offered to repay just a few lakhs," added Advocate Gaurav Mitra, counsel for IDBI Trusteeship (Franklin Templeton).
Other major lenders such as HDFC Bank, IDBI Trusteeship (Edelweiss), LIC Housing, and IndusInd Bank also opposed the repayment plan. However, some creditors including Corpcall Capital Advisors and Direct Media Distribution Ventures supported the proposal.
Case background and insolvency proceedings
In April 2024, The National Company Law Tribunal (NCLT) on Monday ordered insolvency proceedings against media mogul Subhash Chandra, following a plea filed by Indiabulls Housing Finance. The decision, announced by a two-member bench in Delhi, comes in response to Chandra's role as a guarantor for a loan extended to Essel group firm Vivek Infracon Ltd.
Vivek Infracon, a subsidiary of the Essel Group, defaulted on a payment of approximately Rs 170 crore in 2022, prompting Indiabulls Housing Finance to seek legal recourse.
With the admission of the petition, a moratorium automatically commenced against Chandra in relation to all debts. This barred creditors from initiating or continuing any legal proceedings against him until the conclusion of Corporate Insolvency Resolution Proceedings (CIRP).
Chandra was also restrained from disposing of or transferring his personal assets during this period. The NCLT is expected to hear and adjudicate upon the creditors' objections in April.
