Union Bank To Challenge NCLT Approval Of Subhash Chandra Resolution Plan

Mumbai: Union Bank of India intends to contest the approval of the resolution plan in the personal insolvency proceedings involving Essel Group Chairman Dr Subhash Chandra, as per a media statement released on Saturday. The financial institution intends to take the matter to the National Company Law Appellate Tribunal (NCLAT), according to the statement.

Several lenders opposed the resolution plan, with Union Bank of India, Canara Bank, and LIC Housing Finance rejecting the proposed resolution plan and urging the NCLT not to approve it. Despite this, the tribunal approved the plan after obtaining majority support from certain private-sector creditors.

The repayment plan, however, has drawn criticism as it provides creditors with a recovery of just 0.03 percent on a total claim of ₹22,006.57 crore, resulting in a nearly 99.97 percent haircut. HDFC Bank has also expressed interest in challenging the NCLT order, stating that only 3.2 percent of its total claim has been admitted under the order, with a total claim of ₹680 crore.

The case has garnered attention due to the substantial reduction creditors face under the approved repayment plan.