Full Text | Subhash Chandra apologizes to creditors, says negative forces hampering Zee stake sale

Zee Entertainment Enterprises shares plunged 33 percent intraday to hit the 44-month low of Rs 288.95 on Friday after a media report said Essel Group's name may figure in a probe linked to demonetisation-led deposits of Rs 3,000 crore. The stock closed at Rs 319.35 - the lowest since May 2015, down Rs 114.75, or 26.43 percent on the BSE.

The company, however, told investors in a conference call ‘it had nothing to do with the news reported by the Wire’ and that it has Initiated legal action against The Wire Media Group.

The steep correction was not limited to Zee Entertainment only. Other Essel Group stocks - Essel Propack (down 16 percent), Zee Media Corporation (9 percent) and Dish TV (33 percent) were also caught in selling pressure.

Here is the full text of Subhash Chandra’s letter to the creditors:

Dear Friends,

At a very early stage of my life, I have learnt the most important lesson from my grandfather, Shri Jagannath Goenka, which taught me that a direct dialogue with the creditors should be maintained, should you find it difficult to repay any sort of loans, and this message is my earnest effort in doing so.

First and foremost, vide this message I would like to express my deepest apologies to our esteemed financial supporters. I have always been the first to accept my faults and we have been consistently accountable for the decisions taken, and I will maintain the same today as well. For the first time in my career of 52 years, I am compelled to apologize to our bankers, NBFCs & Mutual Funds, since I believe that I have not lived up to their expectations, despite the best of my intentions.

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.

That said, I am not indicating that there are no mistakes done from my end, and as always, I am willing to face the consequences of the same. I assure you, that I am not running away from the core issue and will do my best to repay each and every person. The best time for the same, however, is difficult to be mentioned at this stage. I would also like to state through this message, the key points which have gone wrong:

1. Essel Infra: As most of the infra companies, even we have made some incorrect bids. In usual cases, Infra Companies have raised their hands and have left their lenders with non-performing assets, but in our case, My Obsession of not walking away from the situation has made me to bleed Rs 4000 crore to Rs 5000 crore. Despite the loss-making projects, we continued to pay the interest and the principle, by borrowing funds against our shareholdings in Listed Companies.


2. Acquisition of D2H: My recommendation made to my brother Jawahar Goel to buy D2H from Videocon was one more key error, which costed me and Jawahar both, a fortune.


3. When our family business separation was implemented, as the eldest member of the family, I had taken the entire burden of the debts. I believe, it was my mistake to have told myself that “Subhash you can earn and repay the creditors”. Post which, most of my bets on the new businesses have not worked, which led to the increased debt, due to the added interest levels.


4. The situation at hand, became further unmanageable after the IL&FS issue, came to public light. Till then, we were managing our borrowings efficiently. The IL&FS meltdown stopped the roll overs, diminishing our ability to service our borrowings.


5. From May / June 2018 onwards a negative force which was acting against our grip as promoters became strongly active. This was followed by some anonymous letters being sent to all Bankers, NBFCs, Mutual Funds, Shareholders, etc.


6. Whenever we have reported some really good results from the operating Companies, the share prices were intentionally hammered by these negative forces, driving away the investors.

• We wrote a number of complaints to the Department of Police, Home Minister of Maharashtra, SEBI and other concerned authorities, right since November 2018, but all the efforts did not result in any action.


• Till December, we continued to pay the due interest and principle, to all lenders.


• I have also given my best to expedite the stake sale of ZEE Entertainment. Infact, I have just returned back from London, last night itself, after a series of positive meetings with potential suitors.

I must also mention that there is no systematic protection against the insidious attack on us by the mentioned negative forces, but we will continue to seek the support of the system in order to thoroughly investigate the matter.

About the Operating Companies:

• All Operating Companies, especially our most precious one which is ZEE Entertainment, are performing exceptionally well and are under NO stress whatsoever. The debt burden is purely at the promoter level, which is reflecting negatively on the Companies.


• I would like to reiterate that ALL the Companies are performing exceptionally well and there is no problem whatsoever.

I would again like to reiterate that I have no intention whatsoever, to keep a single rupee, till all the dues to the lenders are paid.

Yours truly,

Subhash Chandra