The Enforcement Directorate (ED) has initiated a money laundering investigation involving Subhash Chandra, a prominent media figure, in relation to an alleged loan fraud that reportedly resulted in a loss of Rs 1,322 crore to Life Insurance Corporation Housing Finance Limited (LICHFL). This action was confirmed by officials on Monday, who noted that the case has been filed under the Prevention of Money Laundering Act (PMLA). The ED’s case follows a First Information Report (FIR) lodged by the Central Bureau of Investigation (CBI).

Allegations of Inflated Net Worth

Chandra is accused of inflating his net worth to secure loans from LICHFL, which he subsequently defaulted on. According to the allegations, he submitted net-worth certificates that were used to obtain approval for two loans amounting to Rs 980 crore. The complaint filed by LICHFL, which is part of the CBI FIR, claims that the defaults on these loans led to significant financial losses for the organisation.

In August, LICHFL reported that the default on the loans caused a total loss of Rs 1,322 crore. The organisation has also contested a repayment plan approved by the National Company Law Appellate Tribunal (NCLAT), which allowed creditors to recover only approximately Rs 6.5 crore from Chandra’s personal estate, despite claims amounting to around Rs 22,006 crore.

The loans in question include a Rs 500 crore facility extended to Vasant Sagar Properties Private Limited, with Pan India Infra Projects Private Limited as a co-borrower, and a Rs 480 crore facility provided to Digital Subscriber Management and Consultancy Services Private Limited, with Spirit Infra Power and Multi Ventures Private Limited as a co-borrower. The allegations suggest that the funds were misappropriated by the borrower entities.

Details of the Loans and Guarantees

The Rs 500 crore loan to Vasant Sagar was sanctioned as a home-entity loan aimed at takeover, top-up, and business expansion, secured by a guarantee executed by Chandra on March 28, 2018. Similarly, the Rs 480 crore loan was sanctioned as a rental-discounting facility under a rental-securitisation scheme, also secured by a guarantee from Chandra. The FIR indicates that the net-worth certification submitted by Chandra was issued by DJM and Co, certifying his net worth at approximately Rs 59,000 crore.

Moreover, another net-worth certificate, issued by chartered accountants MPJ and Co on July 6, 2018, stated Chandra’s net worth at Rs 40,562 crore, which was also used to secure the digital facility. However, both loans eventually went into default, leading to the current legal proceedings.

During the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, Chandra reportedly denied possessing the net worth indicated in the certificates submitted to LICHFL. He later estimated his net worth at Rs 31.79 crore in 2024, and at no more than Rs 40,000 crore for the financial year 2017-18, according to the FIR.

Company’s Response to Allegations

In response to the allegations, a spokesperson for Zee Entertainment Enterprises Ltd stated that the ED’s case pertains to Chandra in his personal capacity and does not impact the company or its operations. The spokesperson clarified that the issues raised are related solely to Dr Subhash Chandra and the promoter entities, asserting that they have no implications for ‘Z’ or its business activities.

The situation continues to develop as legal proceedings unfold, with the ED and CBI actively pursuing the case against Chandra and the associated entities. The outcome of these investigations may have significant implications for all parties involved.

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