Unpaid dues: Operational creditors may drag Siti Networks to NCLT

Ayushi Kar Mumbai | Updated on October 12, 2021

Firm said to owe vendors about ₹1,600 crore

Even as Zee Entertainment is facing legal trouble with one of its investors, another Essel Group enterprise Siti Networks is likely to be dragged to the National Company Law Tribunal by dissatisfied business operational creditors for debt resolution.

A senior official in Siti Networks told BusinessLine on conditions of anonymity that “the legal team of Siti is looking into the matter of creditors taking the company to the NCLT.”

Essel Group shareholding

Essel Group owns 6.1 per cent shareholding in Siti Networks. Senior officials in Siti confirmed that creditors taking the company to the tribunal are not banks or shareholders but business operational creditors, who are usually vendors supplying goods and materials to the company. According to bankruptcy law, these vendors can take the company to NCLT to settle their dues. Sources said the company owes an estimated ₹1,600 crore to its vendors.

Financial stress

Subhash Chandra’s Essel group has been under financial stress for the past two years which forced the company to sell many of its assets, including businesses in infrastructure, renewable energy and road projects. A key casualty in this endeavour to settle the dues has been the loss of substantial ownership in, what Chandra considers to be ‘crown jewels’ of his businesses, Zee Entertainment Enterprises Limited (ZEEL).

Here, his personal stake has been divested down to 3.99 per cent, where he enjoyed upwards of 40 per cent ownership in 2019.

Zee Entertainment Enterprises is also fighting a battle in NCLT with its largest minority shareholder Invesco, on removal of promoter Punit Goenka from the company’s board.

Meanwhile, YES Bank wants to oust the entire board of DTH services provider Dish TV, including Jawahar Goel, brother of Essel Group Chairman, Subhash Chandra.

Published on October 12, 2021

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