99.97% haircut! NCLT approves Subhash Chandra's Rs 6.5 crore payout to settle Rs 22,006 crore dues: Report

The National Company Law Tribunal (NCLT) has cleared a repayment plan under which media baron Subhash Chandra will pay Rs 6.5 crore to settle admitted creditor claims of around Rs 22,006.57 crore in his personal insolvency resolution process, according to news agency PTI.

The approval translates into a haircut of about 99.97 per cent for creditors. NCLT Member (Judicial) Nilesh Sharma, appointed as the third member after a split verdict by the original two-member bench, approved the plan under Section 114 of the Insolvency and Bankruptcy Code (IBC).

The order rejected objections raised by dissenting creditors, led by LIC Housing Finance, which had argued that the proposed recovery was too small and that the plan was "unviable and unlawful".

LIC Housing Finance had pointed out that against its admitted claim of Rs 1,322.39 crore, the proposed repayment was only Rs 38.09 lakh, or around 0.028 per cent of its dues. It also argued that the Rs 6.5 crore payout was indicative and therefore not sufficiently certain for approval.

The tribunal, however, noted that the objecting creditors together accounted for less than 20 per cent of the voting share, while the repayment plan had received approval from creditors representing 80.81 per cent of the voting share.

The NCLT said the resolution professional's valuation showed that Chandra's personal estate was worth significantly less than the amount offered under the repayment plan. It observed that creditors could potentially have a better chance of recovering their dues from the principal debtors if Chandra's insolvency was resolved.

The tribunal also said it could not substitute its own commercial wisdom for that of the creditors while examining the repayment plan. Its role, it said, was "supervisory, corrective and judicial".

The NCLT further held that an approved repayment plan is binding on all creditors under Section 115 of the IBC, including those who voted against it. Dissenting creditors cannot independently pursue recovery of their original claims outside the approved plan, it said.

The resolution professional has been directed to prepare a revised and final list of creditors after giving effect to exclusions and take steps for redistribution of the approved repayment plan value.

The matter will now return to the original division bench for a formal order in accordance with the majority opinion.

Separately, Zee Entertainment Enterprises Ltd (ZEEL) shares were trading 0.43 per cent higher at Rs 104.85 in Thursday's trade. At this level, the stock has climbed 19.87 per cent over the last six months.