Financial Daily from THE HINDU group of publications
Wednesday, Dec 22, 2004
Financial Daily from THE HINDU group of publications Wednesday, Dec 22, 2004 |
|
|
|
|
|
Corporate
-
Corporate Disputes Zee Telefilms plans legal action against Padmalaya arm's chief Our Bureau
Mumbai , Dec. 21 ZEE Telefilms Ltd (ZTL) has decided to initiate legal action against Mr G.A. Seshagiri Rao, Chairman and Managing Director of Padmalaya Enterprises Pvt Ltd (PEPL), a subsidiary of ZTL and Padmalaya Telefilms Ltd (PTL), and his brother Mr G.S.R Krishna Murthy. ZTL said it had appointed Chennai-based chartered accountants, Guru and Ram, to investigate into PEPL and PTL after it learnt of certain irregularities in their functioning sometime in August. The investigations pointed out `various unauthorised and fraudulent acts perpetrated by Mr Rao and his relatives.' According to ZTL, Mr Rao and his family members executed a shareholders' agreement in August 2002 detailing the mode and manner of administration, exercise of control over the day-to-day management of PEPL and PTL. ZTL had nominated Mr Rao as its nominee and Managing Director of PEPL and PTL to look after day-to-day working. ZTL said Mr Rao and his family misappropriated 62,64,631 shares of PTL held by PEPL to provide security for raising loans in the name of Mr Rao, Mr Krishna and their companies. However, the loans raised on these shares were not reflected in the books of accounts of PEPL and no explanation has been furnished as to the end use of the funds raised, ZTL said. The board of PEPL did not know of these transactions as ``they were suppressed and excluded from the company's records and board deliberations.'' The audited accounts and books of PEPL did not record the movement of the shares as either transfers or as pledged but continued to reflect the full investment in PTL shares. The audited accounts of PEPL recorded receipt of dividends from PTL from its investments even though they had not been received. Similarly, the statutory filings made by PTL with stock exchanges till June 2004 regarding its shareholding pattern did not reveal any change in the same, ZTL said. ZTL also revealed that in the books of PTL for the financial years 2002-03 and 2003-04, substantial amounts of fictitious transactions were put through resulting in overstating of turnover and profits and consequent inflation in current assets. ``Huge amounts of cash were withdrawn from PTL and funds were diverted to the promoter shareholder,'' ZTL said. As a result of ZTL inquiry into the books of PTL for the year 2003-04, its audited accounts were recast. As per the earlier audited accounts dated July 26, PTL's total revenue was shown at Rs 106 crore with a net profit of Rs 18 crore. As per the re-cast accounts approved by the board in its meeting held on December 6, total revenue was restated to Rs 94 crore with a net loss of Rs 32 crore. Our Hyderabad Bureau reports: Refuting the allegations levelled against him and his family members by Zee TeleFilms, the Chairman and Managing Director of Padmalaya Telefilms Ltd (PTL), Mr G.A. Seshagiri Rao, told Business Line that the Zee group held majority stake in Padmalaya entities and Zee nominees had been running the day-to-day management affairs of PTL for the last couple of years. Mr Rao said his brother, Mr G.S.R. Krishna Murthy, was not on the boards of any of the Padmalaya entities that were currently controlled by the Zee group. Further, Mr Rao said he was the only a minority member on the board of Padmalaya representing the original promoters, while the nominees of Zee group dominated the Padmalaya board. Refuting the charges of misappropriation of shares for raising loans, Mr Rao said the decision to raise funds was taken by the Padmalaya board and with the knowledge of a majority of the Zee nominees on the board.
More Stories on : Corporate Disputes | Radio/TV
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|