MUMBAI: Zee Telefilms Ltd (ZTL) has reached a settlement with the promoters of Padmalaya companies, whom it had accused of misappropriation of shares.

According to the agreement, ZTL will be given 21,000 sq metres of land in Padmalaya Studios located in Hyderabad. The valuation of the property is close to Rs 500 million, says a source in Zee Telefilms. Consequent to this, ZTL will completely exit from Padmalaya.

Zee is likely to write off Rs 100 million as it had invested Rs 590 million in acquiring a majority stake in Padmalaya. ZTL had taken a 64 per cent stake in Padmalaya Enterprises Pvt LTD (PEPL). PEPL formed the holding company and held a 50.3 per cent controlling stake in Padmalaya Telefilms LTD (PTL), a listed company.

Already 17,000 sq metres has been transferred to ZTL, says the source. Padmalaya Studios is a privately held company by the promoters of Padmalaya and has land in the prime locality of Hyderabad.

"We are expecting the remaining 4,000 sq metres to be transferred within two months," he adds. Zee is planning to sell the land to recover its investments in Padmalaya.

As part of the settlement, ZTL will also get back Zee Institute of Creative Arts (ZICA) which had been transferred to Padmalaya. ZICA is a training institute specialising in animation. "We wanted to protect the interests of the animation students," the source says.

ZTL had earlier accused Padmalaya founder-promoter GA Seshagiri Rao, along with his relatives, of pledging PEPL's shares in PTL to raise loans without the knowledge of the board. As a result of the misappropriation, PEPL's holding in PTL has dropped from 50.3 per cent to about 20 per cent. Zee's indirect interest in PTL had, as a result, fallen from 33 per cent to around 13 per cent.