Mumbai: Union Bank of India is set to challenge the National Company Law Tribunal’s (NCLT) approval of a resolution plan in the personal insolvency proceedings against Essel Group Chairman Subhash Chandra, according to a statement issued on Saturday.
The personal insolvency proceedings against Chandra were initiated by Indiabulls Housing Finance Limited.
In the statement, Union Bank of India, along with other creditors, including Canara Bank and LIC Housing Finance, had voted against the resolution plan and opposed its approval before the NCLT.
“In the matter of personal insolvency case filed by Indiabulls Housing Finance Ltd against Subhash Chandra, Union Bank of India (UK) Limited along with other public sector undertakings like Canara Bank, LIC Housing Finance Ltd, etc, have rejected the resolution plan and pleaded before NCLT for not approving the same,” it said.
Despite their objections, the tribunal approved the resolution plan after it secured the required majority support from certain private-sector creditors.
Union Bank of India said it will now approach the National Company Law Appellate Tribunal (NCLAT) to challenge the NCLT’s order.
The development follows a similar move being considered by HDFC Bank.
On Thursday, HDFC Bank said it was exploring an appeal against the NCLT order, saying that only 3.2 per cent of its total claim of Rs 680 crore had been admitted under the Tribunal’s order.
“However, due to majority vote of certain private creditors, the same plan has been approved by NCLT,” it added.
“Now, Union Bank of India (UK) Limited is immediately challenging the decision of NCLT before NCLAT,” the public sector lender said.
The NCLT’s decision has drawn attention from lenders because of the substantial haircuts involved, with creditors expected to recover only a small portion of their claims under the approved resolution plan.
Chandra, however, has disputed the characterisation of the proceedings.
In a statement on Thursday, Chandra said he had not personally borrowed money from the lenders involved and had acted only as a personal guarrantor for loans taken by borrowing entities linked to the wider Essel Group.
He also clarified that the widely reported figure of Rs 22,006 crore represented the total claims filed in the insolvency proceedings and should not be interpreted as the current amount payable or the final liability in the matter.
(IANS)
