KTR Questions Centre Over 99.97% Debt Reduction in Subhash Chandra Case

BRS working president and Telangana MLA K.T. Rama Rao (KTR) has questioned the NDA government at the Centre over reports of a 99.97% haircut in the personal insolvency proceedings involving Essel Group founder Subhash Chandra.

Reacting to the reports in a post on X, KTR drew a comparison between the treatment of ordinary borrowers and influential individuals. He said farmers, small traders and salaried employees who struggle to repay loans or EMIs are often labelled defaulters or classified as NPAs, while wealthy and powerful individuals appear to receive substantial relief.

“Is this a failure of the justice system? Does the NDA government have any answer?” KTR asked, demanding a response from the Centre on the issue.

The controversy was triggered by reports suggesting that only around Rs 6.25 crore could be recovered from Subhash Chandra’s personal estate against claims of more than Rs 22,000 crore, leading to the reported 99.97% haircut.

However, government sources have disputed the broader interpretation of the figures, clarifying that the Rs 22,006 crore did not represent loans personally borrowed by Chandra. The claims were registered against him because he had provided personal guarantees for borrowings by several companies linked to the Essel/Zee Group.

According to the clarification, the insolvency proceedings are against Chandra in his capacity as a personal guarantor, and not against the companies that originally borrowed the money.

The Centre has therefore maintained that it would be incorrect to conclude that banks are facing a 99.97% loss on the entire Rs 22,000-crore exposure. The proposed haircut, it said, relates specifically to the amount recoverable from Chandra's personal estate.

The principal borrower companies remain liable for their outstanding dues, government sources said, adding that creditors can continue recovery proceedings against the companies and their available securities and assets.

Under the proposed repayment plan, around Rs 1,494 crore could be recovered from the principal borrower companies, while approximately Rs 6.25 crore is proposed to be recovered from Subhash Chandra personally. Creditors may also pursue further recovery from securities and other assets available with the respective companies.