CBI files FIR against ZEE Group owner Subhash Chandra in loan fraud case
The FIR was registered by CBI's Banking Securities Fraud Branch on August 31.
The Central Bureau of Investigation (CBI) has registered an FIR against Subhash Chandra, the founder of ZEE TV and Chairman of the ESSEL Group, several companies, and their directors. It is alleged that Chandra inflated his total assets to secure loans from Life Insurance Corporation Housing Finance Limited (LICHFL). These loans later defaulted, causing a loss of over ₹1,322 crore to the public sector lender.
The CBI's Banking Securities Fraud Branch filed the FIR on August 31. The case is based on a written complaint filed by Neeta Menghani, General Manager of LICHFL.
According to the FIR,
LICHFL has alleged a loss of over ₹1,322 crore in connection with two loan facilities provided in 2018, in addition to interest and other charges. It is claimed that Subhash Chandra provided personal guarantees for both loans.
In addition to Subhash Chandra, the FIR names Vasant Sagar Properties Private Limited, its director Pankaj Surolia, Pan India Infrastructure Private Limited, Digital Subscriber Management and Consultancy Services Private Limited, its director Amish Pandya, Spirit Infra Power and Multi Ventures Private Limited, and its director Rajiv Dholakia as accused. The names of unknown public servants and some other individuals are also included.
According to the complaint,
LICHFL had provided a loan facility of ₹500 crore to Vasant Sagar Properties Private Limited and Pan India Infra Projects Private Limited. Additionally, ₹480 crore was lent to Digital Subscriber Management and Consultancy Services Private Limited and Spirit Infra Power and Multi Ventures Private Limited.
The complaint alleges that Subhash Chandra issued 'Letters of Continuing Guarantee' for both loan facilities. The first guarantee was allegedly given on March 28, 2018, and the second on August 10, 2018.
LIC Housing Finance alleges that,
these loans were sanctioned based on net worth certificates submitted by Subhash Chandra. In the certificate dated March 28, 2018, related to the loan from Vasant Sagar, Chandra's total assets were shown as $6,197.62 million as of March 31, 2017. This was stated to be approximately equivalent to ₹59,113.21 crore. In contrast, the alleged certificate issued for the second loan facility on July 6, 2018, recorded his total assets as ₹40,562 crore.
The complaint further states that during subsequent proceedings related to personal bankruptcy resolution, Chandra denied having such assets as recorded in the certificates submitted to LICHFL.
According to the complaint,
Chandra claimed that his total assets were only ₹31.79 crore in 2024. He also stated that in the year 2017-18, his assets were not more than ₹40,000 crore. According to the details recorded in the FIR, both loan accounts defaulted. The loan related to Vasant Sagar has ₹570.50 crore outstanding, and the loan associated with Digital Subscriber has ₹507.25 crore pending. The total loss in this entire matter is estimated at ₹1,322 crore.
LICHFL alleges that,
Subhash Chandra, in collusion with the borrowing companies, their officials, and directors, induced the lender to grant loans based on fraudulent and inflated net worth documents. The complaint also alleges misuse and misappropriation of funds. It is claimed that the assets of the personal guarantor were separated to thwart the recovery process.
It is noteworthy that when Subhash Chandra, the founder of ZEE Group, faced criticism over the 99.97 haircut case, the National Company Law Tribunal (NCLT) has currently stayed its order. The NCLT acknowledged that this haircut was excessive and illegal, causing significant losses to banks. The newly constituted five-member bench of the NCLT recently stayed the order approving Subhash Chandra's plan to pay ₹6.25 crore against approved loan claims of over ₹22,006 crore.
The bench has also prohibited Subhash Chandra from selling or transferring his assets until a fresh hearing of the case.
This order came just a week after the tribunal approved the repayment proposal. HDFC, Union Bank, and LIC Housing Finance had strongly criticized the very low amount of repayment compared to the total claims and rejected the haircut proposal.
The bench, headed by NCLT Chairperson Justice (Retd) Anupinder Singh Grewal, has issued notices to all parties, including Subhash Chandra, seeking responses. The bench clarified that the order approving the proposal dated August 25 cannot be implemented for now, as no majority opinion could be reached among the members.