Essel Group has admitted that the Serious Fraud Investigation Office (SFIO) has asked the group for information regarding certain transactions and that documents were provided.
At the same time, the group’s promoters met lenders — with whom shares were pledged — and ‘arrived at an understanding that a default won’t be declared due to sharp fall in share prices.’ “I am pleased to share that we have achieved an understanding with the lenders,” said Subhash Chandra, chairman, Essel Group.
“We have always valued their immense trust and faith shown in us and the positive and progressive outcome of the meeting is a true example of the same. I am very positive that we will continue to take such positive steps in rising up from the current challenging times, with support of all stakeholders,” he added.
“There will not be any event of default declared due to the steep fall in price,” Essel Group said in a separate statement on Sunday.
“Information/documents relating to certain transactions were sought by SFIO in July/August 2018 from certain Essel Group entities and requisite information/documents were provided,” Zee Entertainment Enterprises Ltd (ZEEL) — the group’s flagship firm — said in response to a clarification sought by the stock exchanges after a news website reported that some companies probed by the agency for suspect demonetisation deposits had links with the Essel Group.
“Since all information sought by SFIO has been provided by Essel Group entities and no further information has been subsequently sought, the matter stands closed for Essel Group entities,” ZEEL informed the exchanges. The group said the firms named in the website as being probed by the SFIO ‘do not belong to the Essel Group.’ In a statement, ZEEL said it had ‘no connection, whatsoever, with any alleged transaction(s), contained in the article published by a media platform.’
Legal action
“Essel Group has also filed a legal case against the media platform which has maliciously attempted to establish a linkage between the SFIO’s investigation and ZEE Entertainment Enterprises Ltd.’s promoters,” the statement said. On Friday, Essel Group firms’ shares fell, wiping off ₹14,000 crore worth investors’ wealth prompting Mr. Chandra to issue a statement admitting to financial issues being faced by the group, but seeking lenders’ patience till the sale of promoter stake in ZEEL was completed.
The Essel Group statement added that there will be a unified approach by the lenders and they can draw comfort from reiteration by the promoters for a speedy resolution through a strategic sale in a time bound manner.
Mr. A. Balasubramanian, CEO, Aditya Birla Sun Life AMC, said, “We have always believed in the intrinsic value of Zee Entertainment and most above, the sheer value system with which its promoters function. I am very glad with the outcome of the meeting, which enabled us to arrive at a consensus, in the interest of all stakeholders.”
