Reliance denies Subhash Chandra's 'baseless remarks' on media brands

Reliance Group has denied Essel Chairman Subhash Chandra's 'baseless remarks'. Government sources also clarified reports on a 99.97% haircut on loans, stating the case is about Chandra as a personal guarantor, not the primary borrower.

The Reliance Group in an exchange filing on Friday said that it has noted with "dismay the baseless remarks by Essel Group chairman Shri Subhash Chandra" and said its media brands have "never been used to attack anyone nor will they ever be".

"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 in the media statement.

"We hold Shri Subhash Chandra in high regard as a businessman and entrepreneur. We wish him well," it added.

Govt Clarifies 'Haircut' in Insolvency Case

Government sources earlier rejected reports suggesting that banks have taken a 99.97 per cent haircut on more than Rs 22,000 crore of loans in the personal insolvency case involving the Essel Group founder.

Sources said the Rs 22,006 crore figure does not represent money personally borrowed by Chandra. It represents claims admitted against him as a personal guarantor for loans taken by several Essel/Zee-linked companies.

The distinction is important because the insolvency proceeding is against Chandra in his capacity as a guarantor and not against the companies that originally borrowed the money.

The controversy arose after reports compared claims of more than Rs 22,000 crore with around Rs 6.25 crore proposed to be recovered from Chandra's personal estate, describing it as a haircut of nearly 99.97 per cent.

Government sources said that the comparison does not reflect the full picture.

"The reported 99.97% haircut is therefore not a 99.97% loss on Rs 22,000 crore of bank loans," according to the government note.

It said the reduction relates specifically to what can be recovered from Chandra as a personal guarantor. The companies that actually borrowed the money remain liable for their dues.

Creditors' Objections and Repayment Plan

According to the sources, the repayment plan envisages around Rs 1,494 crore of payments by the principal borrowers, apart from Rs 6.25 crore from Chandra personally. Creditors can also continue recovery against securities and other available assets of these companies.

The repayment plan had received 80.81 per cent support from creditors. However, several lenders, including LIC Housing Finance, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank, opposed it.

One of the main concerns raised by creditors was the sharp fall in Chandra's disclosed net worth. They pointed to net-worth certificates showing Rs 45,888 crore in 2017 and Rs 40,562 crore in 2018, compared with a presently disclosed net worth of around Rs 31.79 crore, and sought greater scrutiny of his assets.

Government sources also stressed that the case is an exceptional personal-guarantor resolution and should not be seen as representative of recoveries under the Insolvency and Bankruptcy Code.

Subhash Chandra Responds to 'Misinformation'

Subhash Chandra on Thursday said reports surrounding his personal insolvency proceedings before the National Company Law Tribunal (NCLT) have presented an incorrect picture of the claims against him, stressing that he was only a personal guarantor and had not personally borrowed money from any lender.

In a statement issued from his office, the Chairman of Essel group, which owns Zee Media, said the total claims in the insolvency proceedings should not be equated with the current amount outstanding. He said while claims filed in the proceedings totalled about Rs 22,006 crore, of which Rs 21,696 crore were admitted, the claims of lenders that have objected to his repayment plan stood at Rs 3,992 crore. Of this, Rs 620 crore has already been settled, leaving Rs 3,372 crore, he said.

"I have to state that certain vested media houses are spreading wrong information about my personal insolvency matter in NCLT," Chandra said, urging media platforms to publish the facts and remove what he described as misinformation arising from interpretations of the court order.

NCLT Approves Plan

The National Company Law Tribunal (NCLT) this week approved a repayment plan for Zee Group founder, allowing creditors to receive around Rs 6.5 crore against admitted claims totalling Rs 22,006.57 crore.

(Except for the headline, this story has not been edited by Asianetnews Editorial staff and is published from a syndicated feed.)