Now Reading: Subhash Chandra gets Rs 22,000 crore debt settlement for Rs 6.5 crore
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Subhash Chandra gets Rs 22,000 crore debt settlement for Rs 6.5 crore
Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises Ltd, has settled a Rs 22,000 crore personal debt with a consortium of lenders for just Rs 6.5 crore, a 99.97% haircut that has…
Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises Ltd, has settled a Rs 22,000 crore personal debt with a consortium of lenders for just Rs 6.5 crore, a 99.97% haircut that has sparked controversy. The settlement, reached under a one-time settlement scheme, was approved by a committee of creditors.
Critics have questioned the massive write-off, which allows Chandra to retain personal assets including a flat in Mumbai and property in Delhi. The Insolvency and Bankruptcy Board of India is reportedly examining the deal for compliance with regulations.
Indian Opinion Analysis
The settlement dwarfs earlier corporate debt restructurings. Under the RBI's 2016 framework for one-time settlements, lenders typically accept a 30-50% haircut. The scale of this write-off effectively transfers the loss to public sector bank shareholders and depositors, as most of the 27 lenders are state-owned. The RBI's 2022 circular on compromise settlements requires lenders to justify any settlement exceeding Rs 100 crore to its board. The board's approval and the IBC's review will determine if this deal sets a precedent for other high-profile debtors.
Source: indiatoday.in
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