CBI books Zee founder Subhash Chandra over Rs 1,322 crore loan fraud

The Central Bureau of Investigation (CBI) has registered an FIR against Zee founder and Essel Group chairman Subhash Chandra, several companies and their directors for inflating his net worth to secure loans from Life Insurance Corporation Housing Finance Ltd (LICHFL).

The defaults caused a wrongful loss of more than Rs 1,322 crore to the public sector lender, according to the FIR.

The FIR was registered by the CBI’s Banking Securities Fraud Branch on August 31 based on a complaint by Neeta Menghani, general manager of LICHFL. The case relates to two loan facilities sanctioned in 2018 and secured by personal guarantees given by Chandra.

LICHFL granted a Rs 500 crore facility to Vasant Sagar Properties Pvt Ltd and Pan India Infra Projects Pvt Ltd, and another Rs 480 crore facility to Digital Subscriber Management and Consultancy Services Pvt Ltd and Spirit Infra Power and Multi Ventures Pvt Ltd. Chandra executed continuing guarantees for both facilities.

The lender alleged that the loans were sanctioned on the basis of net worth certificates submitted by Chandra. One certificate dated March 28, 2018, put his net worth at USD 6,197.62 million, or approximately Rs 59,113.21 crore, as of March 31, 2017. Another certificate dated July 6, 2018, showed his net worth at Rs 40,562 crore.

The complaint further alleged that during subsequent personal insolvency proceedings, Chandra denied having the net worth stated in the certificates. It said he claimed his net worth in 2024 was Rs 31.79 crore and that even in 2017-18 it had not exceeded Rs 40,000 crore.

According to the FIR, both loan facilities subsequently defaulted. The outstanding amounts cited were Rs 570.50 crore for the Vasant Sagar facility and Rs 507.25 crore for the Digital Subscriber facility.

LICHFL has alleged that Chandra colluded with the borrowing entities and their directors to obtain the loans using false and inflated documents. The complaint also alleges misappropriation and misapplication of funds and stripping of assets to defeat recovery proceedings.