New Delhi [India], August 28 (ANI): Bharat Rashtra Samithi (BRS) Working President and Telangana MLA K. T. Rama Rao (KTR) on Friday criticised the National Company Law Tribunal (NCLT) over the reported 99.97 per cent haircut in a debt settlement case, alleging that ordinary citizens face strict action for loan defaults while wealthy individuals receive major relief.

In a post on X, KTR said, 'Any common man, be it a farmer or a small business owner or a salaried employee with an EMI, will be taken to task and will be called defaulters/NPA. But for the rich and the mighty in our country, they get away with a 99.97% waiver.'

https://x.com/KTRBRS/status/2093159086204322147?s=20

Questioning the government, he added, 'What a travesty of justice this is, NCLT??!! Any answers from the NDA Govt leadership?'

The controversy arose after reports compared claims of more than Rs 22,000 crore with around Rs 6.25 crore proposed to be recovered from Essel Group founder Subhash Chandra's personal estate, describing it as a haircut of nearly 99.97 per cent.

Meanwhile, Government sources have rejected reports suggesting that banks have taken a 99.97 per cent haircut on more than Rs 22,000 crore of loans in the personal insolvency case of Chandra.

Sources said the Rs 22,006 crore figure does not represent money personally borrowed by Chandra. It represents claims admitted against him as a personal guarantor for loans taken by several Essel/Zee-linked companies.

The distinction is important because the insolvency proceeding is against Chandra in his capacity as a guarantor and not against the companies that originally borrowed the money.

'The reported 99.97% haircut is therefore not a 99.97% loss on Rs 22,000 crore of bank loans,' according to the government note. It said the reduction relates specifically to what can be recovered from Chandra as a personal guarantor.

The companies that actually borrowed the money remain liable for their dues. According to the sources, the repayment plan envisages around Rs 1,494 crore of payments by the principal borrowers, apart from Rs 6.25 crore from Chandra personally. Creditors can also continue recovery against securities and other available assets of these companies. (ANI)