Essel Group founder Subhash Chandra has disputed reports on his personal insolvency proceedings before the National Company Law Tribunal (NCLT), saying the Rs 22,006 crore figure being reported represents claims filed at an earlier stage of the proceedings and does not reflect the current position.
In a statement issued from his office on Thursday, Chandra said he had not personally borrowed money from the lenders involved in the proceedings and had instead acted as a personal guarantor for loans raised by companies associated with the Essel Group.
According to Chandra, the claims of lenders that have objected to the repayment plan currently stand at Rs 3,992 crore. Of this, Rs 620 crore has already been settled, while the borrowing entities have offered around Rs 1,113 crore to multiple lenders.
The clarification comes days after reports on the NCLT proceedings highlighted the gap between the claims admitted in Chandra’s personal insolvency case and the amount proposed to be paid under the resolution plan. Chandra said the proceedings, which have been pending since February 2022, have involved multiple sets of claims and that the Rs 22,006 crore figure cited in recent reports was based on documents showing claims filed at an earlier stage.
“The numbers being quoted in the reports as judgement are taken from the documents as total claims filed. It does not represent the current status,” Chandra said.
He also said the matter remains technically pending before the NCLT, as the judge’s opinion is yet to be converted into a final order.
Chandra says he was guarantor, not borrower
According to Chandra, the insolvency proceedings stem from personal guarantees he provided to lenders for borrowings by companies associated with the Essel Group. He reiterated that he had not undertaken personal borrowing from the creditors named in the proceedings.
Chandra said most of the personal guarantees were signed after January 24, 2019, when the group had already defaulted in the financial system. According to his statement, lenders subsequently approached him to provide guarantees over concerns about the potential impact on employees. He agreed after the borrowing companies assured him that the loans would ultimately be repaid.
As of January 24, 2019, the total outstanding borrowings of the companies stood at close to Rs 45,000 crore, Chandra said. Of this, the borrowing entities have since repaid close to Rs 43,000 crore.
The total value of guarantees signed by Chandra was approximately Rs 22,000 crore, while creditors subsequently filed claims of Rs 22,006 crore in the personal insolvency proceedings. Of this, Rs 21,696 crore was admitted by the resolution professional, according to the statement.
Repayment plan received 80.8 per cent approval
Chandra said the repayment plan presented to creditors received approval from 80.814 per cent of creditors when it was put to vote by the resolution professional. Some financial creditors subsequently challenged the plan before the NCLT, with other lenders later joining the group of objectors.
Chandra’s statement categorises the lenders into two broad groups: those that have objected to the repayment plan and those that have either accepted it or have not filed objections.
The first group accounts for 19.251 per cent of the total claims and had filed claims amounting to Rs 3,992 crore. Of this, claims worth Rs 620 crore have been settled, leaving Rs 3,372 crore.
The borrowing entities admitted only Rs 1,033 crore of these claims while disputing the remainder, according to Chandra’s statement. The resolution professional, however, rejected those disputes.
Figures attributed to the borrowing companies show that lenders in this group had originally released Rs 2,856 crore, of which Rs 1,633 crore had been repaid, leaving a balance of Rs 1,223 crore. Against this, the lenders had claimed Rs 3,992 crore.
The borrowing entities have offered approximately Rs 1,113 crore to multiple lenders in this group, Chandra said. Of this, Rs 620 crore has already been settled, while discussions on the remaining amount are continuing.
Rs 16,200 crore claims relate to other lenders
The second group comprises lenders that have either accepted the repayment plan or have not filed objections against it. Chandra said these lenders had filed claims totalling Rs 16,386 crore at the time of filing, of which Rs 16,201 crore was admitted by the resolution professional.
The borrowing companies have also disputed claims made by this group, but the resolution professional did not accept those disputes, according to the statement.
Chandra said the borrowing entities are in the process of settling the remaining amounts owed to these lenders. He added that this commitment formed part of the plan approved by the NCLT but was not reflected in some recent media reports.
The statement seeks to distinguish between the gross claims admitted during the insolvency process and the amounts that remain subject to settlement by the original borrowing companies.
Chandra disputes net worth claims
Chandra also challenged claims about his personal net worth that have featured in the insolvency proceedings.
According to his statement, one lender had claimed that his net worth was Rs 45,888 crore in 2017. Chandra disputed this, saying the figure allegedly represented the combined market capitalisation of Essel Group companies rather than his personal wealth.
He said his declared assets stood at Rs 39.08 crore in 2016, based on a declaration made to Parliament, and questioned how Rs 45,888 crore could subsequently have been treated as his personal net worth.
According to the statement, his net worth had fallen to Rs 31.79 crore in 2024. Chandra attributed part of the decline to payments he made personally, including salaries of employees when the borrowing companies were unable to make those payments.
His current assets, according to the statement, include a residential property valued at close to Rs 25 crore. Chandra said the Rs 6.5 crore repayment plan was arrived at based on his ability to pay from his personal assets.
2019 turning point
The statement also reproduced an open letter issued by Chandra on January 24, 2019, when financial stress within the group had intensified.
In the letter, Chandra acknowledged mistakes in the group’s business decisions and apologised to lenders, including banks, NBFCs and mutual funds. He said the group had faced difficulties after several business bets failed and borrowing costs increased.
He specifically cited losses in infrastructure projects and the acquisition of Videocon’s D2H business as factors that had affected his finances.
Chandra said that following the separation of the family business, he had assumed responsibility for the group’s debts with the expectation that he would be able to earn and repay creditors. However, the subsequent failure of several new businesses, coupled with rising interest costs, made the situation increasingly difficult.
He also identified the IL&FS crisis as a major turning point, saying the collapse affected companies’ ability to roll over borrowings and consequently weakened their ability to service debt.
