Essel Group founder Subhash Chandra
| Photo Credit:
AKHILESH KUMAR
Canara Bank, Union Bank of India (UK) Ltd and LIC Housing Finance Ltd on Saturday said they will challenge the National Company Law Tribunal's (NCLT) order approving a repayment plan proposed by Essel Group founder Subhash Chandra, escalating the legal battle over the settlement of claims arising from his personal guarantees.
Canara Bank, which held a 1.60 per cent voting share, said it had voted against the repayment plan and will file an appeal before the National Company Law Appellate Tribunal (NCLAT). Canara Bank, in a social media post on X said it had also sought a forensic audit, but the request could not be allowed because of its minority voting share. Union Bank of India (UK) also said it had rejected the plan and would immediately challenge the NCLT order before the NCLAT.
LIC Housing Finance said it would file an appeal along with other public financial institutions. The lenders said the plan was approved because other financial creditors holding 80.81 per cent of the voting share backed it. The NCLT had on August 25 approved Chandra's repayment plan, under which ₹6.25 crore is to be paid to creditors and ₹25 lakh towards insolvency-process costs, against admitted claims of around ₹22,006.57 crore.
The proceedings relate to personal guarantees given by Chandra for borrowings raised by Essel Group-linked companies. The plan was approved despite objections from several lenders, with the tribunal holding that the required majority had supported it.
Chandra in a public statement issued on Thursday rejected the portrayal of the ₹22,000-crore figure as money personally borrowed by him, saying it represents claims arising from guarantees he had provided for corporate borrowings. Chandra argued that the claims of lenders opposing the repayment plan amount to around ₹3,992 crore, rather than ₹22,000 crore, and said the group remains committed to settling outstanding obligations.
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