Subhash Chandra Debt: How Was a Rs 22,006 Crore Claim Settled for Just Rs 6.25 Crore?

The NCLT has approved a repayment plan for Zee Group founder Subhash Chandra, settling ₹22,006 crore in claims for just ₹6.25 crore. This has become a hot topic across India. Let's break down the story.

Image Credit : Essel Group Subhash Chandra

How did Zee Group founder Subhash Chandra's ₹22,006 crore debt get limited to ₹6.25 crore?

The NCLT approved a repayment plan for Zee founder Subhash Chandra, allowing him to settle claims of ₹22,006 crore for just ₹6.25 crore. This decision has sparked a huge debate. Banks are unhappy, but government sources say the 99.97% loan waiver story is misleading. Let's find out what really happened.

Image Credit : Asianet News

Is the '99.97% haircut' news misleading?

Government sources clarified that the NCLT's approval doesn't mean banks are forgiving a ₹22,000 crore loan. The ₹22,006 crore figure is not Subhash Chandra's personal loan. It is the value of claims for which he acted as a 'personal guarantor' for various Essel/Zee companies. The main borrowing companies are still responsible for their debts. The haircut only applies to the amount that can be recovered from Chandra personally.

Image Credit : Asianet News

Why are the banks unhappy with this plan?

LIC Housing Finance (LICHFL) and HDFC Bank are strongly opposing the NCLT's decision. They argue that settling a ₹22,006 crore claim for just ₹6.25 crore is illegal and unacceptable. Banks also question how Chandra's net worth dropped from over ₹40,000 crore in 2018 to just ₹31.79 crore now. They are preparing to challenge the order in the National Company Law Appellate Tribunal (NCLAT).

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How are recoveries made in normal insolvency cases?

Sources say Chandra's case is a unique personal guarantor resolution and doesn't reflect the overall success of the Insolvency and Bankruptcy Code (IBC). Under the IBC, banks have recovered ₹4.32 lakh crore through resolution plans by March 2026. This shows the law is effective in handling corporate insolvencies. The next step is for the NCLT bench to issue a formal order, after which banks are expected to appeal.