After the Delhi bench of the National Company Law Tribunal (NCLT) approved a repayment plan under which Zee founder and Essel Group chairman Subhash Chandra will pay just Rs 6.25 crore to lenders and Rs 25 lakh towards legal fees to settle his personal insolvency case involving guarantees for a debt pile of Rs 22,007 crore, several lenders have decided to challenge the order before the appellate tribunal NCLAT.
HDFC Bank was the first lender to publicly announce earlier this week that it would challenge the order. Other lenders planning to approach the NCLAT include public sector lenders Canara Bank and Union Bank of India, as well as LIC Housing Finance (LICHFL).
The development comes despite the repayment plan securing 80.81% of the votes of creditors. The plan provides for a payment of just Rs 6.25 crore against admitted claims of around Rs 22,006.57 crore, translating into a 99.97% haircut on the admitted claims.
Canara Bank said it, along with Union Bank and LICHFL, had voted against the repayment plan.
“We have a voting share of 1.60% along with other public sector entities Union Bank of India (0.76% voting share) and LICHFL (6.09% voting share). We all had opposed and voted against the repayment plan submitted by Chandra for Rs 6.25 crore. However, it was approved by other private creditors with majority vote (80.81% voting share),” the bank said.
Canara Bank also said it had sought a forensic audit, but the request could not be pursued because of its minority voting share. “In fact, we had demanded a forensic audit but were not allowed in view of our minority voting share. We are filing an appeal in the NCLAT,” it said.
Union Bank’s UK subsidiary said it had rejected the resolution plan along with other public sector banks and had sought its rejection before the NCLT.
“However, due to the majority vote of certain private creditors, the same plan has been approved by the NCLT. Now, we are immediately challenging the decision before the NCLAT,” it said.
LICHFL also said it had voted against the repayment plan. “We and other public financial institutions voted against Chandra’s repayment plan. The plan was ultimately approved on account of the votes cast in favour of the repayment plan by the other financial creditors, aggregating to 80.81%. We will immediately file an appeal before the NCLAT, along with the other public financial institutions,” it said.
LICHFL had an admitted claim of Rs 1,322.39 crore, against which the repayment plan provides for just Rs 38.09 lakh, according to the NCLT order.
