Banks to appeal NCLT approval of Subhash Chandra repayment plan

Days after the controversial NCLT Order favouring media baron Subhash Chandra, many lenders such as Union Bank of India (UK) Ltd, Canara Bank and LIC Housing Finance Ltd have decided to challenge the order reducing liability from more than Rs 22,000 crore to just Rs 6.25 crore. The controversial order came in a case filed by Indiabulls (now name changed as Sammaan Capital) against Subhash Chandra, from invoking personal guarantee against the loans to firms related to him.

These lenders will challenge the NCLT’s decision in the National Company Law Appellate Tribunal (NCLAT) as they are aggrieved by the former’s decision, which gives them a recovery of just 0.03 per cent of their admitted dues. Referring to the matter of a personal insolvency case filed by Indiabulls Housing Finance Ltd against Subhash Chandra, Union Bank of India, in a statement, said its wholly-owned UK subsidiary “along with other public sector undertakings like Canara Bank, LIC Housing Finance Ltd etc have rejected the resolution plan and pleaded before NCLT for not approving the same.”

However, due to a majority vote of certain private creditors, the same plan has been approved by NCLT, it added. Now, Union Bank of India (UK) Ltd is immediately challenging the decision of NCLT before NCLAT, per the statement.

Canara Bank, in its statement, said the bank (1.60 per cent voting share), along with other public sector entities Union Bank of India (0.76 per cent voting share) and LIC Housing Finance (6.09 per cent voting share), opposed and voted against the repayment plan submitted by Chandra for `6.25 crore.  However, the repayment plan was approved by other private creditors with a majority vote (80.81 per cent voting share), it added.

“In fact, Canara Bank demanded a forensic audit, but the same could not be allowed in view of our minority voting share. The bank is filing an appeal in NCLAT against the NCLT order,” the public sector bank said. LIC Housing Finance Ltd, in its statement, noted that it and other public financial institutions, including Canara Bank and Union Bank of India (UK) Ltd., voted against the repayment plan proposed by Chandra. 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 per cent.

LIC HFL said it will immediately file an appeal before the NCLAT, along with the other public financial institutions. HDFC Bank was the first to come out with the statement challenging the order in NCLAT.

HDFC Bank, in its statement a couple of days back, observed that its admitted claim was only 3.2 per cent of the total stated claim amount. The bank inherited this facility, which was previously provided by HDFC Ltd.

Meanwhile, Subhash Chandra came out in the media, blaming Mukesh Ambani for attacking him through his media organisations by putting out “wrong stories”. Reliance Industries rejected Chandra’s allegations.