MANY LIVES OF SUBHASH CHANDRA: ₹22,000-cr Debt and nexus of power, politics and influence
Paranjoy Guha Thakurta and Ayush Joshi
A ₹22,000-cr debt crisis exposes the tangled nexus of power, politics and business influence
The approval by the National Company Law Tribunal (NCLT) of a personal insolvency repayment plan that permitted Zee/Essel group head Subhash Chandra to settle ₹22,006.57 crore in admitted creditor claims for ₹6.5 crore, translating to a 99.97 per cent haircut for banks and financial institutions, has triggered a fresh debate about the efficacy and equity of India’s corporate debt resolution frameworks.
1. Power Built the Empire
Subhash Chandra’s business empire was built not just on the media. A school dropout, the Agarwal bania from Hissar, Haryana, diversified from trading in agricultural commodities to plastic packaging, amusement parks, infrastructure and real estate. His rise was closely intertwined with political power. Chandra hobnobbed with corporate tycoons, some of whom he now regards as rivals. From his ties to the Bharatiya Janata Party (BJP), its ideological parent the Rashtriya Swayamsevak Sangh (RSS), his contentious election to the Rajya Sabha in 2016 and the 2012 extortion sting involving his editors and industrialist and then Congress MP Naveen Jindal, the 76-year-old Chandra (who, unlike his son, does not use his surname Goenka) has been embroiled in several controversies. We elaborate on some of the more recent ones in this article.
So far, he has managed to avoid severe criminal penalties. But his time may have run out, and his past seems to have caught up with him. He took on the Times of India group in 2005 by starting the DNA English daily in collaboration with the Dainik Bhaskar group. Fourteen years later, the venture was shut down. Earlier, in the late 1990s, he was accused of colluding with the stock market scamster Ketan Parekh and indicted by an all-party Joint Parliament Committee. He was held responsible for rigging the prices of his companies’ shares.
Chandra now finds himself under regulatory scrutiny from the Securities and Exchange Board of India (SEBI), the country’s financial markets regulator. He has also become embroiled in a public spat with Mukesh Ambani, chairman of Reliance Industries Limited, India’s largest private-sector company. On September 8, the Central Bureau of Investigation (CBI) filed a first information report (FIR) against Chandra and his associates, alleging fraudulent transactions worth ₹1,322 crore between 2018 and 2026 that sought to scam LIC Housing Finance Limited, an arm of the country’s largest insurer, Life Insurance Corporation (LIC).
2. The 99.97% Haircut
The ₹22,006.57 crore liability on Chandra did not originate from his personal borrowings alone. Insolvency proceedings began with a corporate default. Vivek Infracon, an entity affiliated with the Essel group, defaulted on a ₹170 crore loan from Indiabulls Housing Finance. Because Chandra had provided a personal guarantee to secure the debt, Indiabulls initiated personal insolvency proceedings against him under Section 95 of the Insolvency and Bankruptcy Code (IBC) in 2022.
Under the IBC, once an interim moratorium is imposed against a personal guarantor, all creditors holding guarantees from that individual must submit their claims to the Resolution Professional to be consolidated into a single proceeding. Financial institutions holding personal guarantees from Chandra for loans to various Essel group entities submitted their claims, expanding the recorded liability from the initial ₹170 crore loan default to an aggregate admitted claim total of over ₹22,000 crore.
A repayment plan was presented to the Committee of Creditors (CoC). The plan proposed that Chandra pay ₹6.25 crore to creditors from his personal estate, along with ₹25 lakh to cover administrative costs of the insolvency process, bringing the total outlay to ₹6.5 crore. Measured against the ₹22,006.57 crore in admitted claims, the recovery rate stood at approximately 0.028 per cent, or roughly 3 paise for every ₹100 claimed. The remaining 99.97 per cent of the guaranteed debt was sought to be written off.
The repayment plan received approval from 80.814 per cent of the creditors by vote share, exceeding the statutory threshold under the IBC to bind dissenting minority creditors.
The original two-member bench of the NCLT was divided on the legality of the process. The tribunal’s Judicial Member Ashok Kumar Bhardwaj favoured conditional approval binding only on assenting creditors. At the same time, Technical Member Reena Sinha Puri rejected the plan, citing procedural defects and irregularities in the Resolution Professional’s admission of claims. To resolve the internal division within the NCLT, the tribunal appointed a third member, Nilesh Sharma. On August 25, Sharma issued an order approving the repayment plan.
Dissenting institutional lenders, including HDFC Bank, LIC Housing Finance, Canara Bank and Union Bank of India (UK), challenged the composition of the CoC. They argued that five entities holding a combined 61.78 per cent voting share were linked to Chandra’s family and qualified as “related parties” or “associates” under Section 79(2)(g) of the IBC, which should have barred them from voting. By allowing them to vote, the lenders argued, the process was subverted, enabling entities sympathetic to the promoter to push through a highly favourable, near-total debt waiver.
Sharma rejected these objections, ruling that the dissenting lenders had failed to conclusively prove that the disputed entities satisfied the strict statutory definition of an “associate” under Section 79(2)(g), and that allegations of a relationship or historical affiliation with Chandra were legally insufficient to disenfranchise these creditors and exclude their votes. He also rejected the dissenting lenders’ demands for a forensic audit into Chandra’s assets, noting that while earlier net worth certificates raised legitimate questions, they did not legally establish that assets had been illegally concealed or diverted.
Meanwhile, SEBI took action against Zee group founder Subhash Chandra and his son Punit Goenka, following investigations into corporate governance lapses and allegations of siphoning of assets. They were barred from participating in the country’s stock markets for one year. Financial penalties were imposed on the two, as well as on the company they promoted, Zee Entertainment Enterprises Limited (ZEEL). SEBI alleged that immovable property belonging to ZEEL located in Hyderabad was secretly mortgaged to secure ₹726 crore in loans obtained by private entities associated with the Essel group. The mortgage was executed using an allegedly false declaration of compliance and without obtaining prior authorisation or approval from ZEEL’s audit committee, board of directors or public shareholders.
The irregularities came to light when auditors repeatedly flagged missing original title deeds for the Hyderabad property that were subsequently found with the lender and were used as unauthorised collateral. Besides restricting Chandra and Goenka from trading in the securities markets (including in mutual funds) for a year, SEBI imposed financial penalties of ₹60 lakh on Subhash Chandra, ₹58 lakh on Punit Goenka and ₹30 lakh on ZEEL, which was also barred for two months from accessing the securities markets, thereby stalling the company’s ongoing fundraising and warrant-issuance plans.
3. A Sting Turns Sour
In the chequered history of controversies involving his media network, Chandra’s public fight in 2012 with Naveen Jindal, the then MP from Kurukshetra, Haryana, belonging to the Congress party, in which television anchor Sudhir Chaudhary (then with Zee News and currently with public broadcaster Doordarshan) was involved, is memorable even if the “scandal” ended as a damp squib. Jindal somersaulted to the BJP.
During the height of the Indian coal block allocation controversy (colloquially known as “Coalgate”) during the term of the second United Progressive Alliance (UPA) government led by Manmohan Singh, industrialist and politician Jindal orchestrated an elaborate sting operation. The hidden camera footage captured the then top Zee News editors Chaudhary and Sameer Ahluwalia, allegedly seeking to extort ₹100 crore in the form of guaranteed advertising commitments from Jindal’s steel and power conglomerate to the Zee group.
Jindal filed a police complaint, leading to the arrest of Chaudhary and Ahluwalia, while Chandra himself was named in the FIR. The first two were remanded to police custody after courts rejected their initial bail pleas, viewing the evidence as substantial. Chandra, however, secured anticipatory bail and avoided arrest. While Chaudhary and Ahluwalia declined to take a polygraph test, Chandra agreed to undergo one before a Delhi court. The Zee editors denied the blackmail allegations, asserting that they were conducting a “reverse sting” operation designed to expose what they claimed was an attempt by Jindal to suppress journalistic scrutiny.
After years of litigation, the two groups came to an “understanding.” In 2012, during a press conference, Jindal had claimed: “The government gives (TV) channels a licence to show news. They are not given a licence for extortion or blackmail.”
In November that year, the crime branch of the Delhi Police arrested Chaudhary and Ahluwalia and later released them on bail. There were defamation and counter-defamation lawsuits. Nearly six years later, Chandra and Jindal announced that they had withdrawn the cases filed against each other, and Jindal claimed that the litigation was on account of “miscommunication”. Chaudhary, who was stung on camera, claimed that “truth had prevailed” and that his “innocence” had been proved. The entire sting operation can be viewed using this link on YouTube.
On the so-called settlement, the Delhi High Court had observed in March 2015: “This is another unfortunate case where two known corporate personalities are fighting each other tooth and nail, oblivious of consuming precious judicial time.”
Advocate Sushil Salwan told Newslaundry: “This is what we call a luxury litigation, which means the parties are fighting the cases for ego or for the sake of it,” adding that in such cases where the time of the courts is abused, the courts “should take a serious view and caution” the litigants.
4. 14 Ballots, One Pen
In June 2016, Subhash Chandra contested for a seat in the Rajya Sabha as an independent candidate from his home state, Haryana, backed by the ruling BJP. His main opponent was R K Anand, a senior lawyer who had secured the backing of a coalition comprising the Indian National Lok Dal (INLD) and the Congress.
Given the composition of the 90-member Haryana state legislative assembly, the electoral arithmetic favoured Anand who, theoretically, had enough pledged votes from the opposition coalition to secure a comfortable victory. But that was not to be. The final ballot count yielded a victory for Chandra, who defeated Anand by eight votes. How did this happen? The outcome was due to the sudden and unprecedented invalidation of 14 Congress votes on a specific technicality.
The Returning Officer (R K Nandal, the then Secretary of the Vidhan Sabha) summarily rejected twelve ballots from Congress representatives because the legislators had apparently used an unauthorised “royal blue” sketch pen to mark their preferences, rather than the official, “strictly mandated” violet pen provided by the Election Commission inside the voting booth. Two additional ballots were rejected for marking errors. Under the rules governing secret ballots, any variation in the marking ink can invalidate a ballot, as it could serve as a pre-arranged signal to identify how a particular legislator voted, potentially facilitating the switching of political allegiances.
Anand and the Congress leadership immediately filed formal complaints with the Election Commission and lodged an FIR alleging criminal conspiracy, fraud and the subversion of the democratic process. Anand alleged that the official violet pen was clandestinely removed from the voting compartment and replaced with an identical-looking royal blue pen for a specific window of time when Congress MLAs were voting.
In his police complaint to Chandigarh’s Inspector General of Police, Anand accused BJP MLA Aseem Goel, independent MLA Jai Parkash, Subhash Chandra and government officials of sabotage. Anand pointed out the statistical impossibility of 14 experienced Congress MLAs independently making the same error with an unauthorised pen, unless the pen provided on the table inside the polling booth had been intentionally swapped to trick them into invalidating their ballots. Further, allegations of deliberate cross-voting and internal party sabotage were levelled against factions within the Congress, specifically those loyal to former Chief Minister Bhupinder Singh Hooda, suggesting they colluded to ensure the BJP-backed candidate’s victory to settle internal party scores.
Following an inquiry in September 2016, the ECI indicted Returning Officer Nandal for “concealment of material facts” and “wilful non-compliance” with rules. The Commission recommended severe disciplinary action against him and ordered the state police to register an FIR against “unknown persons” for the fraud.
Despite the ECI’s indictment, Chandra retained his Rajya Sabha seat. In March 2017, Anand’s election petition was dismissed by the Punjab and Haryana High Court, not by ruling on the merits of the allegations, but on a procedural technicality. The court noted that Anand had failed to file the requisite affidavit in the prescribed format using Form 25 under Section 83(1) of the Representation of People Act, 1951.
5. War With the Regulator
In 2023 and 2024, SEBI launched fresh investigations into allegations that ZEEL, Chandra and Goenka had siphoned approximately ₹200 crore from the publicly listed company for their private benefit. The regulatory probe resulted in interim orders barring both Chandra and Goenka from holding key managerial positions or directorships in any listed company, effectively decapitating the leadership of the media empire they built.
Rather than quietly navigating the appellate process through the Securities Appellate Tribunal (SAT) or seeking back-channel political interventions, Chandra initiated a public assault on the institution of SEBI itself. On September 2, 2024, he held a press conference accusing the then SEBI Chairperson Madhabi Puri Buch of institutional bias and corruption. Chandra alleged that in February 2024, an intermediary demanded a “three-digit” crore rupees bribe to resolve his regulatory cases. He alleged that the publication of reports by the US-based short-seller Hindenburg Research on the Adani group and the controversies regarding Buch supposedly receiving excessive “retiral benefits” from ICICI Bank while serving as a whole-time member of SEBI established a pattern of compromise.
Chandra demanded that internal communications be disclosed and attributed the collapse of the planned US$10 billion merger between ZEEL and Sony Pictures Networks India to SEBI’s interventions. He alleged that regulatory actions spooked Sony’s board of directors and depressed the prices of ZEEL’s shares. He alleged that SEBI directed the Bombay Stock Exchange and the National Stock Exchange to intervene in the NCLT proceedings to derail the deal. The Zee group chief alleged that Buch was the “main reason” why the merger did not take place and that her actions destroyed wealth for minority shareholders. He said he had written to Finance Minister Nirmala Sitharaman and advised companies in his own Zee group to stop cooperating with the regulator.
6. Chandra vs Ambani
Chandra pointedly accused Mukesh Ambani and the Reliance-owned media network, Network18, specifically naming channels like TV18, CNBC and News18, as the primary architects of a deliberate “witch-hunt” and for spreading a “fake narrative” aimed at irreparably damaging his reputation. In a public statement, Chandra revealed that as the ₹22,000 crore figure began circulating heavily on business networks, he attempted to contact Ambani directly to complain about the coverage by Network18, but received no response, prompting him to write a formal letter.
To substantiate his claims of targeted media malice, Chandra alleged that a mutual acquaintance had contacted the editor-in-chief of Network18 to complain about the loss of journalistic credibility of the media group with respect to the reporting on him. According to Chandra, when a mutual acquaintance questioned Network18’s editorial coverage, the editor of the TV channel allegedly responded that he was acting under “instructions from above” and was “compelled” to maintain the narrative. Chandra was clearly resorting to journalistic techniques while attributing information to anonymous sources.
The rhetoric Chandra employed against Ambani was not just hostile but personal. He invoked the legacy of the Reliance group founder, stating: “I have learnt a lot from your father Dhirubhai Ambani, but it seems you have not adopted his principles. You are trying to kill a person who has nothing left to lose.”
Chandra also alluded to deep-seated corporate espionage activities and advised Mukesh Ambani to rein in top Reliance executives like Manoj Modi. Chandra issued a veiled threat: “You have a lot to lose, and you also have many skeletons in your closet. So stop this dirty game.”
Chandra also claimed that during the financial crisis that hit ZEEL in 2019, when the company’s shares crashed by 40 per cent in a single day, shell companies were indirectly involved in manipulating the company’s share prices. Astonishingly, Chandra claimed that when he approached Mukesh Ambani in 2019 with an offer to sell ZEEL to pay off his mounting debts, Ambani advised him against honouring his obligations to banks and financial institutions and allegedly stated: ‘Subhash ji, why are you paying back the banks’ money, including interest? No one does.’
Reliance quickly sought to neutralise the fallout from Chandra’s claims. A spokesperson expressed “dismay” at Chandra’s “baseless remarks” and denied any targeted media campaigns. The spokesperson also debunked insinuations of market manipulation. The Ambani-led group maintained that its media brands adhere to strict editorial independence: “Our media brands have never been used to attack anyone, nor will they ever be.”
Soon after this public war of words, Chandra dropped direct mentions of Ambani and Reliance from his subsequent public utterances, pivoting his communications strategy entirely towards how he would settle the remaining debt of companies in the Zee/Essel group.
7. A Legal Deadlock
Financial publications took divergent positions on the NCLT ruling. Moneylife, edited by Sucheta Dalal and Debashis Basu, argued that the decision highlighted flaws in the IBC framework. By permitting entities allegedly linked to the promoter family to command 61.78 per cent of the voting share, the process effectively returned control to the debtor, allowing a significant proportion of the debt to be written off while lenders bore the loss, it was argued.
By way of contrast, media industry platform Exchange4Media framed the issue through the prism of laws on corporate finance. Palak Shah argued that personal insolvency recovery is legally confined to the attachable personal estate of the guarantor. Since the Resolution Professional assessed Chandra’s liquid personal estate at between ₹31 crore and ₹32 crore, Shah argued that the ₹6.5 crore recovery was directly tied to the actual personal assets available, maintaining the legal separation between corporate debt and individual assets.
An application filed under the Right to Information (RTI) Act by activist Vivek Velankar revealed that the public sector Bank of Baroda (BoB) alone had technically written off ₹35,715 crore in loans specifically involving large corporate borrowers (defined as dues above ₹100 crore) between the financial year that ended on March 31, 2021 (FY20-21) and FY25-26. During this period, the bank recovered only ₹9,946 crore from these accounts. BoB reported a direct “haircut” of ₹7,817 crore in structured settlements, whilst steadfastly refusing to disclose the names of these big defaulters, citing confidentiality clauses.
Similarly, the country’s largest government-controlled bank, State Bank of India (SBI), reportedly forgave ₹1 lakh crore in NCLT haircuts and wrote off ₹1.52 lakh crore for major defaulters, again ensuring that the names of the borrowing entities were not disclosed.
While the Union finance ministry and the Reserve Bank of India (RBI) defend these write-offs as necessary, globally accepted accounting mechanisms required to clean up balance sheets and allow banks to exit the Prompt Corrective Action (PCA) framework, resume lending and return to profitability, the optics of the entire episode remain controversial. Many believe that the IBC process favours the rich while banks and financial institutions use the services of bouncers and goons to recover small loans taken by lower-middle-class borrowers for purchasing vehicles, consumer durables and small homes.
The government has steadfastly refused to disclose the names of large borrowers who have defaulted on repaying their dues to banks and financial institutions. These loans became non-performing assets (NPAs) – which recently touched 10 per cent of the country’s gross domestic product (GDP) – and portions were written off the books of account of the concerned banks (many of them in the public sector) and financial institutions.
Returning to the narrative on Subhash Chandra, while public debate raged over the ₹22,000 crore haircut, the August 25 ruling by Judicial Member Nilesh Sharma that approved Chandra’s ₹6.5 crore repayment plan quickly unravelled on procedural grounds. When the matter returned to the original division bench for formal implementation under Section 419(5) of the Companies Act, 2013, the bench identified an anomaly: Sharma had issued an independent opinion rather than concurring with either of the two original dissenting members. Because all three members had produced separate findings, no actionable majority existed.
To break the deadlock, NCLT President Justice (retired) Anupinder Singh Grewal constituted a five-member special bench to review the case. On September 1, the expanded bench stayed the operation of the August 25 verdict, agreeing that no clear majority view had emerged as per the provisions of Section 419(5) of the IBC. Acting on submissions by the Solicitor General of India, Tushar Mehta, who appeared on behalf of the dissenting institutional lenders, the tribunal restrained Chandra from selling, transferring or alienating any personal assets pending a fresh hearing that is scheduled for September 23. In response to the restraining order, Chandra publicly said he had full faith in the judicial process.
As mentioned, the Zee case went beyond civil insolvency tribunals and entered the criminal jurisdiction just as the NCLT froze the repayment plan for the Zee/Essel group boss. On August 3, the CBI registered an FIR against Chandra, several Essel group entities and their directors based on a complaint filed by LIC Housing Finance Ltd (LICHFL), one of the primary dissenting creditors in the insolvency case. LICHFL alleged that loans of ₹980 crore sanctioned in 2018 against Chandra’s personal guarantees had not been repaid and that unpaid dues and interest had accumulated to ₹1,322 crore.
The criminal complaint centres on the discrepancy in Chandra’s declared personal wealth. LICHFL stated that in 2018, Chandra submitted net worth certificates valuing his assets between ₹40,562 crore and ₹59,113 crore to secure credit approvals. During the 2024 personal insolvency proceedings, however, Chandra disclosed his personal net worth at just ₹31.79 crore. Accusing the promoter of submitting inflated wealth certificates to seek loans, misusing the loans disbursed and stripping assets to frustrate recovery of dues, the CBI initiated an investigation into alleged acts of criminal conspiracy, cheating and breach of trust.
With his personal assets frozen by the tribunal and a fraud probe underway, Chandra’s bid to resolve his debt obligations faces immediate legal jeopardy. His ability to bounce back currently appears unrealistic. His one-time mentors in the RSS and the BJP are wary of associating with him. He is fighting with his back to the wall.
GFX
DEBT & DEFAULT: AN EXPLAINER
IBC | The Debt Resolution Rulebook
India’s Insolvency and Bankruptcy Code (IBC), enacted in 2016, brought insolvency laws under one framework. Its aim is simple: resolve bad debts within a time-bound process — either by rescuing the defaulter through a repayment plan or by liquidating assets that can legally be attached to repay lenders
NCLT | Where the Battle Begins
The National Company Law Tribunal (NCLT) is the primary quasi-judicial forum for corporate insolvency cases. It oversees IBC proceedings and can approve or reject a proposed debt-resolution plan
NCLAT | The Next Stop
The National Company Law Appellate Tribunal (NCLAT) is the appellate forum above the NCLT. A lender or debtor challenging an NCLT order can take the case to the NCLAT
CoC | Lenders’ Voting Room
The Committee of Creditors (CoC) comprises the financial institutions and lenders to whom the defaulter owes money. Under the IBC, the CoC wields the crucial voting power to accept or reject a resolution plan, guided by what is known as its ‘commercial wisdom’
HAIRCUT | Price of Recovery
A haircut is the portion of a debt that lenders agree to give up while settling a loan. If a bank is owed ₹100 but accepts ₹3, it takes a 97% haircut. In other words, ₹97 is written off in the settlement
NPA | When a Loan Goes Bad
A Non-Performing Asset (NPA) is essentially a bad loan. A loan is generally classified as an NPA when the borrower fails to make interest or principal payments for 90 days
LOAN WRITE-OFF | Off the Books, Not Off the Hook
A write-off allows a bank to remove a bad loan from its active balance sheet when recovery appears unlikely. But the debt itself does not automatically disappear: the borrower can remain legally liable and recovery efforts can continue. For banks, a write-off helps clean up the books and claim applicable tax benefits
PCA | When RBI Puts a Bank on a Leash
Prompt Corrective Action (PCA) is an RBI framework for financially stressed banks. When a bank’s bad loans and other financial indicators cross specified thresholds, the RBI can impose restrictions on its operations, including lending, opening branches or paying dividends, until its financial health improves.
THE BOTTOM LINE
IBC is the rulebook. NCLT is the courtroom. CoC holds the vote. NCLAT hears the appeal. A haircut is the lender’s sacrifice. An NPA is a bad loan. A write-off cleans the books. PCA is the RBI’s warning bell.
Ayush Joshi
