NCLT case coverage: Reliance rejects Subhash Chandra’s allegations against its media entities as ‘baseless’

Mukesh Ambani-led Reliance Group on Friday rejected allegations made by Essel Group chairman Subhash Chandra against Reliance’s media businesses, amid a controversy surrounding Chandra’s personal insolvency proceedings and reports that creditors could face a 99.97% haircut on claims exceeding ₹22,000 crore.

In a statement, Reliance Group expressed its disappointment over Chandra’s comments and described the allegations as “baseless”.

“We strongly deny the allegations and insinuations against the media entities that are a part of the Reliance Group. Our media brands have never been used to attack anyone, nor will they ever be. We hold Shri Subhash Chandra in high regard as a businessman and entrepreneur. We wish him well,” Reliance said.

On Tuesday, NCLT Member (Judicial) Nilesh Sharma, who was appointed as the third member to resolve differences between the original bench members, approved a resolution plan under which Chandra would pay around ₹6.5 crore towards admitted claims of creditors.

The original two-member NCLT bench had delivered a split verdict. Following the disagreement, the President of the tribunal appointed Sharma as the third member to decide the matter.

Creditors challenge payout as ‘unlawful’

Sharma rejected objections raised by dissenting creditors, led by LIC Housing Finance, which had opposed the proposed settlement and described the payout as “unviable and unlawful”.

The creditors argued that the resolution plan offered only ₹6.25 crore towards admitted claims of approximately ₹22,006.57 crore. An additional ₹25 lakh was proposed to meet the costs associated with the insolvency process.

The outcome effectively means that creditors would recover only a tiny fraction of the claims admitted in the proceedings, resulting in a substantial haircut.

Chandra disputes ₹22,000 crore claim figure

On Thursday, Chandra issued a statement disputing reports that the total claims against him in the personal insolvency proceedings amounted to more than ₹22,000 crore.

He said the aggregate claim against him was only “ ₹3,992 crore” and stressed that he was acting as a personal guarantor rather than the borrower in relation to the underlying loans.

The dispute has therefore centred not only on the proposed repayment amount but also on the nature and quantum of liabilities attributed to Chandra in the insolvency proceedings.

Case returns to original NCLT bench

The matter will now return to the original division bench for issuance of a formal order in accordance with the majority opinion. The procedure follows Section 419(5) of the Companies Act, 2013, which governs the course of action after a difference of opinion between tribunal members is resolved by a third member.