HDFC Bank And LIC Housing Finance Challenge Subhash Chandra Loan Waiver: A new twist has come in the loan waiver case of media businessman Subhash Chandra worth Rs 22,000 crore. HDFC Bank and LIC Housing Finance (LICHFL) have opened a front against the loan waiver of Subhash Chandra. Both the financial institutions have protested against Subhash Chandra's settlement of Rs 22,000 crore loan for just Rs 6.5 crore. They are also preparing to approach the National Company Law Appellate Tribunal (NCLAT).
Let us tell you that the 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.
Zee Chairman Subhash Chandra had taken responsibility as guarantor for this huge loan. According to the approved plan, Rs 1,494 crore can be recovered from the main debtors now. Whereas as a personal guarantor, Subhash Chandra has to pay only Rs 6.25 crore. Some banks have expressed strong objection to this matter. However, 80.8 percent of the creditors included in the Committee of Creditors (CoC) fully supported this settlement through voting.
These banks protested with LICHFL
According to media reports, many government and private banks had registered their disagreement in this entire matter. These mainly include LICHFL, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank. HDFC Bank has issued a statement making it clear that it had voted against this proposal. Now the bank is considering the option of filing an appeal in NCLAT. On the other hand, LICHFL has also decided to approach NCLAT. They can also demand intervention in this matter from the National Housing Bank (NHB), the apex institution of the housing sector in India. LICHFL argues that it is not fair in any way to hand over only Rs 6.25 crore to creditors instead of a huge claim of Rs 22,006 crore.
Congress and Vijay Mallya targeted NCLT's decision
Congress had targeted the Modi government and the Insolvency Tribunal on the NCLT decision. Fugitive Indian businessman Vijay Mallya had also targeted him. 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 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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