Subhash Chandra Disputes Insolvency Claims Amid Repayment Efforts

Subhash Chandra, the chairman of Essel Group, has responded to criticisms linked to his personal insolvency, stating that his group has paid back around ₹43,000 crore of the nearly ₹45,000 crore owed following a financial crisis in 2019. In a recent video message, he revealed that he and his family liquidated personal assets, including the sale of their home, to fulfil the group’s repayment obligations.

Chandra refuted the commonly reported figure of approximately ₹22,000 crore related to claims against him under the National Company Law Tribunal (NCLT). He emphasised that these figures do not accurately reflect his personal borrowings, but rather his role as a guarantor for loans taken out by companies affiliated with the Essel Group.

His comments came shortly after the NCLT approved a resolution plan, allowing Chandra to pay ₹6.5 crore towards admitted claims totalling approximately ₹22,006 crore. This has raised concerns among creditors due to the low recovery rate of about 0.03%. Chandra stressed that the ₹22,000 crore figure should be understood in the context of his guarantees linked to the group’s borrowing entities.

The financial difficulties of the Essel Group were first acknowledged by Chandra on January 24, 2019, due to an asset-liability mismatch. He recognised his earlier mistakes and pledged to settle the debts owed to the financial system. "I said that I had made some mistakes," he stated, adding that he took initiative to ensure the group’s borrowing firms met their financial responsibilities.

Chandra indicated that approximately ₹2,000 crore remains tied up in investments with companies where asset-liability mismatches have hindered repayment efforts. He disclosed that his current financial circumstances are starkly different from the wealth he once enjoyed, now possessing around ₹6.5 crore and a modest home, part of which he has rented out.

In addressing the allegations regarding the ₹22,006 crore in claims made against him, Chandra pointed out that this figure emanated from the guarantees he provided for loans acquired by group-related companies, clarifying that he has not personally acquired ₹22,000 crore from banking institutions. He cited objections from lenders amounting to approximately ₹3,900 crore against his resolution plan, stating that ₹620 crore had already been settled, with around ₹1,100 crore offered to lenders.

The approved resolution plan specifies Chandra’s repayment obligation of ₹6.5 crore against the larger admitted claims, a decision that has provoked criticism from financial institutions due to the significant discrepancy between the amounts. HDFC Bank announced that it is considering challenging the NCLT’s order in the appellate tribunal.

In a bid to dispel ongoing confusion, Chandra called for an independent audit of the group's borrowing, repayment history, and outstanding obligations. He urged the banking sector, the Finance Ministry, and banking authorities to appoint an external auditor to review the financial documents of his group. "How much was the borrowing when the group first defaulted in the financial market and how much has it paid till now? The truth will become clear," he remarked.

Chandra's appeal highlights the need for clarity regarding the initial debts and the repayments made to date. He distanced himself from comparisons with other businessmen accused of financial misconduct, insisting that he has openly recognised his past mistakes and dedicated efforts towards repayment.

Moreover, he contested the portrayal of his personal wealth in various reports, stating that the figure of ₹45,000 crore often cited is misleading. This amount is derived from the valuation of group companies and should not be considered his personal fortune. According to Chandra’s office, his total assets were valued at ₹31.79 crore in 2024, including a property worth around ₹25 crore.

Chandra expressed confidence in his ability to rebuild his career despite having faced a significant business decline. He mentioned plans to collaborate with an associate in Switzerland involved in investments, alongside potential plans to borrow ₹2-4 crore from relatives to invest in startups. "I started with ₹17," he reflected on his entrepreneurial journey, claiming that his businesses have created jobs for approximately 8,000 families, and he has paid considerable interest amounts over the years.

Chandra’s personal insolvency process has been ongoing since 2022. The NCLT's recent decision addresses his liabilities as a personal guarantor, while the underlying debts of the borrowing companies remain unextinguished. He concluded his message by encouraging the public to verify claims regarding him circulating on social media before accepting these as facts.