Media Businessman Subhash Chandra Rs 22000 Crore Loan Case: Media businessman Subhash Chandra has got a big relief in his loan of Rs 22,000 crore. National Company Law Tribunal i.e. NCLT has approved to settle the debt of more than Rs 22,000 crore of media businessman Subhash Chandra for just Rs 6.5 crore. Due to this decision of NCLT, lending banks and financial institutions will have to bear the loss of 99.97% of their outstanding money. This decision has raised serious questions on the banking system of the country.
Congress has targeted the Modi government and the Insolvency Tribunal on the NCLT decision. Congress leader Jairam Ramesh taunted and said that this relief given in the name of insolvency is not actually a 'haircut' but a public 'shaking' of the banks. Fugitive Indian businessman Vijay Mallya has also taken a dig at this decision.
Know what is the whole matter
In fact, the Insolvency Tribunal has given the green signal to Subhash Chandra to get free from the huge debt of Rs 22,006.57 crore. In return he will have to pay only Rs 6.5 crore. If we calculate this, it is like waiving off approximately 99.97 percent of the total loan amount. In simple words, by paying just 30 paise instead of a huge loan of Rs 100, one got freedom from the entire loan. Insolvency tribunal NCLT has approved the repayment plan of Subhash Chandra under Section 114 of the Insolvency and Bankruptcy Code. This amount is related to the 'personal guarantee' given by Subhash Chandra. When banks give a loan to a company or the original borrower, many times the promoter gives his personal guarantee that he will repay it if the company is unable to repay. Subhash Chandra had given personal guarantee for the loans taken by Essel Group companies. After the companies defaulted, this claim fell on Subhash Chandra. This does not mean that he borrowed all this money personally.
Congress said- 'Haircut' or straight 'Mundan'?
Regarding this, senior Congress leader Jairam Ramesh has strongly attacked the Central Government and the Tribunal. Jairam Ramesh sarcastically said that this relief given in the name of insolvency is not actually a 'haircut', but a public 'head shaving' of the banks. He said that the Insolvency and Bankruptcy Code (IBC 2016) was brought so that the stuck money of the banks can be returned quickly, but giving a discount of more than 99.9% is a direct mockery of this law.
Pain and sarcasm hidden in Vijay Mallya's congratulations
Fugitive liquor businessman Vijay Mallya, living in Britain, has vented his anger on this decision on social media (X). Mallya congratulated Subhash Chandra in a special way and also took a dig at the Insolvency Tribunal of the country. Mallya quipped that – Till now, Rs 14,100 crore has been recovered from me against the officially declared loan of Rs 6,203 crore. That means, more than double the amount of loan was recovered, yet I am not getting any relief. And on the other hand, the loan of Rs 22,000 crore is being exhausted by paying only Rs 6.5 crore. Perhaps this is the real 'justice' to settle India's debt.
What is 'haircut'?
Insolvency Tribunal actually gives the decision by coordinating the bankrupt companies, banks and government liabilities in the country. In the language of financial journalism it is called 'haircut'. That means reducing the burden of debt from the borrower's head.
What reasons did the insolvency tribunal give for its decision?
The tribunal said that as per the valuation of the resolution professional, the value of personal assets of Subhash Chandra is less than the amount given in the plan. Had this plan been rejected, Chandra would have been declared bankrupt and creditors would have received even less money. With the approval of the plan, Chandra will be able to stand financially again and there will be a possibility of future recovery from the original debtors. After the approval of the court, the resolution professional will now prepare a final list of all the creditors. After this, the amount of ₹6.5 crore will be distributed among all these banks and creditors as per the rules.
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