Subhash Chandra blames negative forces for scuttling promoter stake sale process in ZEEL

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MUMBAI: After ZEEL and Dish TV stocks took a hammering on the stock exchange, Essel Group chairman Subhash Chandra has tried to assuage the lenders and the investors while asserting the process of selling the promoter stake in ZEEL is on track.

Chandra wrote a two-page letter after ZEEL and Dish TV stocks hit a historic low on 25th January with the share price falling by 25-30%. The stocks of these two companies went into a tailspin after a report in news website TheWire.in reported that the Serious Fraud Investigation (SFIO) office was probing a company Nityank Infrapower (formerly Dreamline Manpower) for cash deposits of over Rs 3000 crores post demonetisation.

Dish TV has issued a denial stating that it had nothing to do with the company mentioned in The Wire report.

Following the bloodbath which saw Essel Group losing more than Rs 11,000 crore in market capitalisation, Chandra blamed the ‘negative forces’ for causing damage to the market value of his group companies. He also urged the lenders not to react in an anarchial manner and maintain peace till the process of stake sale in ZEEL is concluded.

“Post the sale process, we will be positively able to repay the entire dues, but if the lenders react in a panic situation, it will only hurt them and us,” Chandra said in a two-page letter.

On the stake sale in ZEEL, he stated that he had positive meetings with potential suitors in London. “I have also given my best to expedite the stake sale of ZEE Entertainment. In fact, I returned back from London, last night itself, a series of positive meetings with potential suitors. The mentioned negative forces, possibly after getting a hint of these positive meetings, the share price today, with a clear intention of sabotaging ZEE Entertainment’s strategic sale process.

He also averred that all operating companies especially ZEEL are performing exceptionally well and are under no stress whatsoever. “The debt burden is purely at the promoter level, which is reflecting negatively on the Companies. I would like to reiterate that ALL the Companies are performing exceptionally well and there is no problem whatsoever. I would again like to reiterate that I have no intention whatsoever, to keep a single rupee, till all the dues to the lenders are paid.”

He also admitted having made wrong decisions like making incorrect bids in the infrastructure business and the merger of direct to home (DTH) operator Videocon d2h with Dish TV, which is now controlled by his brother Jawahar Goel.

“As most of the infra companies, even we have made some incorrect bids. In usual cases, Infra raised their hands and have left their lenders with non-performing assets, but in our case, My Obsession of not walking away from the situation has made me bleed 4000 crore to 5000 crore of Rupees. Despite the loss-making projects, we continued to pay and the principle, by borrowing funds against our shareholdings in Listed Companies,” Chandra said.

“My recommendation made to my brother Jawahar Goel to buy D2H from Videocon was one more key error, which cost me and Jawahar both, a fortune. When our family business separation was implemented, as the eldest member of the family, I had taken the entire burden of the debts. I believe, it was my mistake to have told myself that “Subhash you can earn and repay the creditors”. Post which, most of my bets on the new businesses have not worked, which led to the increased debt, due to the added interest levels,” he added.

Chandra also stated that very promoters in India have dared to sell their prime assets to pay off debt. “I am extremely certain that there is no promoter in India Inc., who has dared to sell the jewel of his crown, to pay off the liabilities. While the process is still ongoing, there are some forces which are not willing to see us succeed.”

He also assured that he is “not running away from the core issue and will do my best to repay each and every person”. In the same breath, he also stated that the best time for the same is difficult to be mentioned at this stage.

Chandra also blamed the IL&FS issue for his plight while stating that the company has paid the due interest and principle to all lenders till December. “The situation at hand became further unmanageable after the IL&FS issue, came to public light. Till then, we were managing our borrowings efficiently. The IL&FS meltdown stopped the rollovers, diminishing our ability to service our borrowings.”

He further pointed out that certain negative forces were hammering the stocks of his operating companies to drive away investors. “From May / June 2018 acting against our grip as promoters became strongly active. This was followed by some anonymous letters being sent to all Bankers, NBFCs, Mutual Funds, Shareholders, etc. Whenever we have reported some really good results from the operating Companies, they were intentionally hammered negative forces, driving away the investors,” he noted.

The Essel Group, he mentioned, has written a number of complaints to the Department of Police, Home Minister of Maharashtra, SEBI and other concerned authorities since November 2018 without much success.


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