Union, Canara Bank to appeal NCLT's Chandra order
Canara Bank, Union Bank of India, and HDFC Bank are appealing an NCLT decision that approved a repayment plan for Zee group founder Subhash Chandra. The plan would see creditors recover only 0.03% of their claims, effectively resulting in a 99.9% haircut.
Why it matters
The case raises significant questions regarding the rights of minority creditors and the fairness of insolvency proceedings involving personal guarantors.
MUMBAI: Canara Bank and Union Bank of India are challenging NCLT's approval of Zee group founder Subhash Chandra's repayment plan, under which creditors would recover 0.03% of their admitted claims relating to his liabilities as a personal guarantor, arguing that the plan was approved despite opposition from public-sector creditors.The insolvency proceedings were initiated by Indiabulls Housing Finance against Chandra. Canara Bank, which has a 1.6% voting share, and Union Bank of India, which has 0.76%, opposed the repayment plan and sought its rejection. LIC Housing Finance, with a 6.1% voting share, also voted against the plan. However, the plan secured the support of private creditors holding an 80.8% voting share and was approved by NCLT.The total admitted claims stood at Rs 22,006 crore, of which Rs 6.5 crore was proposed to be paid, including Rs 6.3 crore to creditors and Rs 25 lakh towards process costs.
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