The National Company Law Tribunal (NCLT) has ordered insolvency proceedings against media baron Subhash Chandra, the Chairman Emeritus of Zee Entertainment Enterprises Ltd (ZEEL). The order was issued in response to a petition filed by Indiabulls Housing Finance Ltd (IHFL), which alleged that Vivek Infracon Ltd., an Essel Group company where Chandra served as a guarantor, defaulted on a payment of around Rs 170 crore in 2022.
This decision follows an earlier ruling by the NCLT in May 2022, which held that the tribunal has the authority to initiate personal insolvency proceedings against personal guarantors. This ruling was challenged by Chandra before the appellate tribunal NCLAT, but the matter was subsequently withdrawn due to settlement intentions. However, the issue was revived earlier this year by IHFL as the settlement with Chandra did not materialize.
As a result of the insolvency proceedings, Chandra will be subject to the moratorium provisions of the Insolvency & Bankruptcy Code (IBC) and will not be permitted to sell, dispose of, or alienate any property or assets. A Resolution Professional will be appointed by the insolvency tribunal to collate all the loans and assist the financial creditors in recovering their funds.
