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PEPL's holding in PTL has fallen from 50.3 per cent to about 20
per cent. The promoter shareholders had pledged the PTL shares held
by PEPL against raising loans without informing the board of PEPL
and ZTL. "Keeping the Board of PEPL and ZTL in the dark, the
promoter shareholders fraudulently with dishonest intentions, misappropriated
6,264,631 equity shares of PTL held by PEPL to provide security
for raising loans in the name of Rao, brother GSR Krishna Murthy
and their related entities/companies, primarily Padmalaya Studios
Private Limited and Padmalaya Vision Ltd," Zee informs in a
release.
The ZTL board, which met today, has directed the company management
to take suitable criminal and civil action against Rao and his relatives
and to make efforts to recover the losses suffered by the shareholders
because of the fraudulent acts.
ZTL has also accused the promoters of cooking up the accounts of
PTL in 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," the
release says. "Huge amounts of cash were withdrawn from PTL
and funds were diverted to related to the promoter shareholder."
As a result of ZTL's inquiry into the books of PTL for the year
2003-04, its audited accounts were recast. As per the earlier audited
accounts dated 26 July 2004, PTL's total revenue was stated at Rs
1.06 billion with a net profit of Rs 180 million. As per the re-cast
accounts approved by the board in its meeting held on 6 December
2004, total revenue was restated to Rs 940 million with a net loss
of Rs 320 million.
Zee's accusations are based on an investigation it initiated after
alleged irregularities in the functioning of PEPL and PTL were brought
to its notice. The company appointed M/s Guru and Ram, Chartered
Accountants, Chennai, to look into the matter. A final investigation
report was submitted on 9 December, 2004.
When ZTL had acquired stake in PEPL and thereby in Padmalaya Telefilms
(promoter shareholders), it nominated Rao as managing director of
both the companies. According to the shareholders agreement, PEPL
can't deal in the shares of PTL unless agreed to by the company
and promoter shareholders and approved by the board of PEPL. No
person, including the board of PEPL, had authority to deal with
its investments in PTL.
"The loans raised on the misappropriated 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 so raised," the
release says.
At the time of filing this report, attempts by indiantelevision.com
to elicit a response from Rao on the charges Zee had thrown his
way were to no avail.
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