The Central Bureau of Investigation (CBI) has registered a case against Subhash Chandra, former chairman of the Essel Group, among others, over a loan of approximately Rs 980 crore from LIC Housing Finance Limited (LICHFL). The CBI's FIR includes allegations of criminal conspiracy, fraud, breach of trust, and causing wrongful gain. The case was registered on a complaint filed by LICHFL at the CBI headquarters.

A significant issue in this matter concerns Subhash Chandra's net worth, that is, his total assets. According to the complaint, the net worth certificates submitted by Subhash Chandra when serving as a guarantor for two separate loans claimed his assets ran into thousands of crores of rupees. However, during subsequent personal insolvency resolution proceedings, Chandra himself questioned these figures, stating that his actual net worth was not that high.

How The Net Worth Changed

The first instance involves Vasant Sagar Properties Pvt Ltd and its co-borrower, Pan India Infra Projects Pvt Ltd. The LICHFL granted a loan of approximately Rs 500 crore to these two companies. This loan was extended as a "takeover and top-up facility" to expand business operations. Chandra provided a guarantee for this loan on March 28, 2018. The complaint notes the net worth certificate submitted by Chandra was a crucial factor in the loan's approval. This certificate, issued by a firm named DIM and Co, on March 28, 2018, stated that as of March 31, 2017, Subhash Chandra's net worth stood at $6,197.62 million (approximately Rs 59,000 crore at today's rates). The second instance involves Digital Subscriber Management and Consultancy Services Pvt Ltd over a loan of approximately Rs 480 crore granted to a co-borrower company, Spirit Infra Power and Multi Ventures Pvt Ltd. This loan was sanctioned based on rental income, and Subhash Chandra provided a guarantee for this, too. In this matter, a separate net worth certificate submitted to the LICHFL pegged Subhash Chandra's net worth over Rs 40,000 crore. This certificate was issued by MPJ & Co, chartered accountants, on July 6, 2018.

In other words, a combined loan facility of approximately Rs 980 crore was extended across the two loans, and at the time Subhash Chandra's financial standing was declared to be in the range of thousands of crores of rupees.

Both loans went into default. The matter then escalated, leading to the initiation of personal proceedings against Subhash Chandra under the Insolvency and Bankruptcy Code (IBC).

What Chandra Said In Insolvency Proceedings  

This is where the most significant question regarding the case arose. According to the CBI's FIR, during these insolvency proceedings, Subhash Chandra refused to acknowledge the figures cited in those net worth certificates as his actual assets.

Essentially, while documents submitted at the time of availing the loans from LICHFL had stated his net worth to be in the thousands of crores, he later claimed during the insolvency proceedings that his assets did not amount to that much.

The complaint states that during the insolvency proceedings, Subhash Chandra declared his net worth to be approximately Rs 31.79 crore for the year 2024. Additionally, he allegedly claimed that even back in 2017-18, his net worth did not exceed Rs 40,000 crore.

This major discrepancy now forms a core part of the CBI's investigation.

The CBI will now investigate whether the net worth was deliberately misrepresented or inflated to secure the loans, and to identify individuals involved in their preparation and use of such documents.

The CBI will pointedly investigate whether there was any criminal conspiracy among the borrowing companies, guarantors, and other associated parties. It will also verify whether the loan amount of approximately Rs 980 crore was used for the specific purpose for which it was sanctioned.

The CBI's action is not limited to Subhash Chandra; the roles of other individuals and associated companies named in the FIR are also under scrutiny. The investigative agency will determine how the documents submitted for the loan were vetted, the basis on which the net worth figures were accepted as valid, and the reasons for the subsequent loan default.