Zee draws line between CBI probe against Subhash Chandra and its business

Zee Entertainment Enterprises Ltd (ZEEL) has distanced itself from an Enforcement Case Information Report (ECIR) registered against its founder, Subhash Chandra, saying the proceedings concern him in his personal capacity and the promoter entities, and have no bearing on the company's operations.

The clarification follows an ongoing Central Bureau of Investigation (CBI) probe into an earlier first information report (FIR) registered by LIC Housing Finance Ltd (LICHFL) over an alleged Rs 1,322-crore fraud involving Chandra and three others.

Also read: Subhash Chandra case: CBI lodges FIR against Essel Group chairman, others in Rs 1,322 cr fraud


“It has been brought to the notice of the Company that an Enforcement Case Information Report (ECIR) addressed to Dr. Subhash Chandra, in his personal capacity, has been registered. The same is on the back of the ongoing investigation by the Central Bureau of Investigation (CBI) pertaining to the previous FIR registered by LIC Housing Finance Limited,” a Zee Entertainment spokesperson said.

“The Company would like to state that the matters are pertaining to Dr. Subhash Chandra and the promoter entities and have no bearing on ‘Z’ or its operations in any manner,” the spokesperson added.

CBI had registered the FIR in September over allegations that Chandra inflated his personal net worth in certificates submitted to LICHFL to secure two loans totalling Rs 980 crore, which subsequently turned into non-performing exposures. The allegations also involve four borrower companies associated with the Essel Group.

Rs 980 crore in loans at centre of CBI case

According to the FIR, the complaint relates to two credit facilities extended by LICHFL. The first was a Rs 500-crore facility to Vasant Sagar Properties Pvt Ltd, with Pan India Infra Projects Pvt Ltd as co-borrower. The second was a Rs 480-crore facility to Digital Subscriber Management and Consultancy Services Pvt Ltd, with Spirit Infra Power and Multi Ventures Pvt Ltd as co-borrower.

The Rs 500-crore facility was sanctioned for loan takeover, top-up and business expansion, while the Rs 480-crore facility was extended under a rental discounting arrangement backed by rental securitisation.

Both facilities were secured by continuing guarantees executed by Chandra.

Investigators are examining allegations that Chandra submitted inflated net worth certificates to help secure the loans. LICHFL told investigators that a certificate issued by DIM & Co on March 28, 2018, put his net worth at around Rs 59,000 crore. Another certificate, issued by MPJ & Co on July 6, 2018, valued his net worth at Rs 40,562 crore.

The FIR points to a discrepancy between these figures and statements Chandra subsequently made during proceedings under the Insolvency and Bankruptcy Code (IBC), 2016. In those proceedings, he pegged his net worth in 2024 at Rs 31.79 crore and said his net worth in 2017-18 was no more than Rs 40,000 crore.

The CBI's case alleges that Chandra colluded with the four borrower companies and their officers and directors to induce LICHFL to disburse the loans. It further alleges that false documents were created to inflate his net worth and secure the lender's approval, while funds advanced were subsequently misappropriated.

Chandra and the other accused had not issued an immediate response to the allegations at the time of the FIR registration.

Also read: ET Exclusive: 'Personally, I don’t have any assets. That is a stated fact,' says Zee founder Subhash Chandra amid 99.97% haircut row

Personal insolvency proceedings add to lender concerns

The investigation comes against the backdrop of a contentious personal insolvency resolution process involving Chandra and his guarantees to lenders.

Three days before the CBI complaint, Chandra had opposed the constitution of a five-member bench of the National Company Law Tribunal (NCLT) to hear his personal insolvency case.

Earlier, a special five-member NCLT bench had stayed the approval of his repayment plan, observing that the earlier opinion did not command a clear majority. It also restrained Chandra from alienating any assets.

The development followed a split verdict by two NCLT members. Judicial member Nilesh Sharma, appointed as the third member, had subsequently approved the repayment plan proposed by Chandra under Section 114 of the IBC and rejected objections raised by dissenting lenders.

The plan involved a personal payment of Rs 6.25 crore from Chandra as guarantor, alongside a separate repayment of Rs 1,494 crore by the principal borrowing companies, according to an earlier ET Bureau report. Creditors holding 80.8% of the voting share had backed the proposal.

However, LICHFL, HDFC Bank, Axis Bank, Canara Bank, RBL Bank and Union Bank opposed it. LICHFL argued that against its admitted claims of around Rs 22,006 crore, the proposal offered only Rs 6.25 crore from Chandra personally, describing the plan as "unviable and unlawful".

The insolvency proceedings attracted wider scrutiny after details emerged of creditors approving a settlement of around Rs 6.5 crore against admitted claims of approximately Rs 22,000 crore linked to Chandra's personal guarantees.