With the controversy over Zee group founder Subhash Chandra’s Rs 6.5-crore repayment plan refusing to die down, MS Sahoo, former chairman of the Insolvency and Bankruptcy Board of India (IBBI), has said a repayment plan is inherently constrained by the guarantor’s resources, irrespective of the amount of the guarantee.
Speaking to TNIE, Sahoo said the plan approved by the National Company Law Tribunal (NCLT) settles the guarantee liability and not the underlying loan, which remains recoverable from the corporate borrowers.
“While IBC permits consolidated proceedings against both borrowers and guarantors, which would have revealed the net haircut, stakeholders did not pursue that path,” he said.
“The key question is whether creditors…