The Central Bureau of Investigation (CBI) has registered a case against Essel Group chairman Subhash Chandra and others for allegedly using inflated net worth certificates to secure loans from LIC Housing Finance Ltd (LICHFL). The loans later went into default, allegedly causing the lender a loss of more than Rs 1,322 crore.
The development comes days after the National Company Law Tribunal (NCLT) put Chandra’s Rs 6.25 crore repayment plan on hold
The CBI case centres on certificates submitted in 2018 to obtain two credit facilities totalling Rs 980 crore. One certificate placed Chandra’s net worth at Rs 59,113 crore. However, during subsequent insolvency proceedings, he reportedly stated that his net worth in 2024 was just Rs 31.79 crore.
LICHFL alleged that the two loans were sanctioned and disbursed on the strength of the net worth certificates and personal guarantees furnished by Chandra.
The first facility of Rs 500 crore was extended to Vasant Sagar Properties Pvt Ltd, with Pan India Infra Projects Pvt Ltd as co-borrower. The loan, sanctioned for takeover, top-up and business expansion, was backed by a continuing guarantee executed by Chandra on March 28, 2018.
According to the complaint, a certificate issued by DIM & Co on the same day placed Chandra’s net worth at Rs 59,113 crore.
The second facility of Rs 480 crore was extended to Digital Subscriber Management and Consultancy Services Pvt Ltd, with Spirit Infra Power and Multi Ventures Pvt Ltd as co-borrower. It was sanctioned under a rental securitisation scheme and was also backed by Chandra’s continuing guarantee.
LICHFL said the second loan was approved partly on the basis of another certificate, issued by chartered accountants MPJ & Co on July 6, 2018, which placed Chandra’s net worth at Rs 40,562 crore.
Both loans subsequently went into default.
According to the FIR, Chandra later disputed the net worth figures contained in the certificates during proceedings under the Insolvency and Bankruptcy Code. He reportedly said his net worth was Rs 31.79 crore in 2024 and had not exceeded Rs 40,000 crore in 2017–18.
The FIR alleges that Chandra acted in collusion with the four borrower and co-borrower companies and their officials to submit false and inflated documents and induce LICHFL to disburse the loans.
It further alleges that the accused misappropriated the funds and breached the lender’s trust, resulting in losses exceeding Rs 1,322 crore between 2018 and 2026.
Separately, Chandra is facing personal insolvency proceedings over a repayment plan under which creditors would recover around Rs 6.25 crore from his personal estate against admitted claims of approximately Rs 22,006 crore.
The Rs 22,006-crore claims arise from personal guarantees Chandra provided for loans taken by several companies associated with the Essel Group.
Chandra has maintained that the Rs 22,006-crore figure does not represent money borrowed by him personally.
A two-member NCLT bench delivered differing opinions on the repayment plan, following which the matter was referred to a third member, who approved it.
Dissenting creditors, including Union Bank of India, Canara Bank and LICHFL, challenged the approval before the NCLAT.
A five-member special NCLT bench subsequently put the plan on hold, saying there was no majority view that could be given effect. It also directed Chandra not to sell or transfer his properties, directly or indirectly.
Chandra’s counsel has challenged the constitution of the special bench. The NCLAT has deferred the matter to October 7.