Union Bank to challenge Subhash Chandra insolvency plan approval

Union Bank of India has announced plans to challenge the National Company Law Tribunal’s (NCLT) approval of a resolution plan regarding the personal insolvency proceedings of Essel Group Chairman Subhash Chandra. The bank, alongside other public sector lenders including Canara Bank and LIC Housing Finance, had previously voted against the plan.

The NCLT approved the resolution plan based on majority support from certain private-sector creditors, despite objections from public sector undertakings. The decision has caused concern among lenders due to the substantial haircuts involved, which would result in creditors recovering only a small fraction of their claims.

Union Bank of India intends to approach the National Company Law Appellate Tribunal (NCLAT) to contest the order. This follows a similar move by HDFC Bank, which is exploring an appeal after reporting that only 3.2 per cent of its Rs 680 crore claim was admitted under the tribunal’s decision.