Subhash Chandra's Essel in trouble over money laundering charges

Mumbai: Essel Group Chairman Subhash Chandra at the engagement party of Reliance Industries Chairman Mukesh Ambani's son Akash Ambani and diamantaire Russell Mehta's daughter Shloka Mehta, at Antilia in Mumbai on June 30, 2018. (Photo: IANS)
Photo: IANS

In an "open letter," Subhash Chandra, Chairman, ZEE & Essel Group, apologised to bankers, NBFCs & mutual funds for "not having lived up to their expectations" hours after Zee Group suffered a loss in market capitalisation to the tune of Rs 14,000 crore. Shares of its entertainment arm had tanked over 30 per cent in the wake of a media report that said its promoter company Essel Group was allegedly involved in money laundering post-demonetisation.

"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… I am not indicating that there are no mistakes done from my end, and as always, I am willing to face the consequences," Chandra said in the letter.

Assuring stakeholders that he is "not running away from the core issue" and that he will do his best to repay each person, he said he would like to express his "deepest apologies" to his financial supporters.

The shares on the BSE lost up to 33 per cent during the intra-day trade but closed 26 per cent lower at Rs 319.35.

The shake-up in Zee shares occurred after the report claimed that the SFIO was probing a company, Nityank Infrapower, for deposits of over Rs 3,000 crore made just after demonetisation that was announced on November 8, 2016.

It also claimed that Nityak Infrapower and a group of alleged shell firms had carried out financial transactions that involved a few companies associated with the Subhash Chandra-led Essel Group between 2015 and 2017.

Zee Entertainment Enterprises shares fell nearly 31 per cent to Rs 299.92 per share on the National Stock Exchange on Friday. It was the worst day for the stock for a single day fall since 1999.

The media report also said that Nityank also played a crucial role in a large business deal between the Videocon and Essel groups in November, 2016.

Essel maintains that Nityank is an independent firm, while Videocon alleges otherwise.

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