PSU Lenders To Challenge NCLT Order, Oppose Subhash Chandra’s ₹6.5-Crore Repayment Plan
· Free Press Journal
New Delhi: Public sector lenders LIC Housing Finance, Canara Bank and Union Bank of India will challenge the National Company Law Tribunal’s (NCLT) approval of Essel Group Chairman Subhash Chandra’s repayment plan in his personal insolvency case.
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The three lenders, which together held an 8.45 per cent voting share in the insolvency proceedings, had opposed and voted against the repayment proposal.
Majority Creditors Back Plan
LIC Housing Finance said the repayment plan was approved after other financial creditors, collectively holding an 80.81 per cent voting share, voted in its favour.
The housing financier said it would immediately approach the National Company Law Appellate Tribunal (NCLAT), along with other public financial institutions, to challenge the NCLT order.
LIC Housing Finance held a 6.09 per cent voting share in the proceedings.
Canara Bank, which had a 1.60 per cent voting share, also said it opposed Chandra’s repayment proposal and would challenge the tribunal’s decision before the NCLAT.
The bank said it had sought a forensic audit during the proceedings. However, its request could not secure approval because of its minority voting share.
Union Bank Also Opposes Plan
Union Bank of India, which held a 0.76 per cent voting share, said it had rejected the repayment plan along with other public sector entities.
The lender also opposed the proposal before the NCLT but said it was eventually approved because of the majority vote of certain private creditors.
The statements followed the NCLT’s approval of Chandra’s repayment plan in the personal insolvency case initiated by Indiabulls Housing Finance.
Under the tribunal’s order, Chandra will pay ₹6.5 crore to settle admitted creditor claims exceeding ₹22,000 crore.
HDFC Bank Exploring Appeal
Private-sector lender HDFC Bank is also considering challenging the order before the NCLAT.
The bank had voted against the resolution but said it was approved by the required majority.
HDFC Bank said only 3.2 per cent of its total claim was admitted under the NCLT order. The loan facility was inherited from its former parent HDFC before the merger of the two entities.