New Delhi, Aug. 27 -- 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 involving Essel Group founder Subhash 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 controversy arose after reports compared claims of more than Rs 22,000 crore with around Rs 6.25 crore pro...