CLB clears Zee's role in Amar Ujala case

The Company Law Board (CLB) has rejected objections raised over the funding for the buy out of shares of majority holders in the Hindi daily Amar Ujala by a Zee-pomoted agency.

"I do not accept the proposition of the learned counsel of the respondents (Maheswaris) that the payment from the current account of Mediawest (Zee-suppported funding agency) cannot be considered to be a payment by the petitioners (Aggarwals). Since the amount was paid on behalf/account of the petitioners, the same has to be held to have paid by the petitioners," CLB chairman S Balasubramanian said in his order.

He said that there was "nothing in the consent order preventing the petitoners from raising funds in any manner as long as the letter and spirit of the order that management control of the company should not be handed over to an outsider for a period of three years is ensured," Balasubramanian said.

CLB also rejected the contentions of the Maheshwaris that 'pay-orders' drawn in favour of the escrow-account holder directly rather than to debit it to Aggarwals amounted to intervention by Zee in the Rs 390 crore group.

The issue was raised by the counsel for the Maheswaris who contended that the Zee group was financing the petitioners in buying the stake of the Maheshwaris as per the roadmap agreed to before the CLB.

He argued that Zee's funding of the deal tantamounts to "indirect takeover" and also contended that Mediawest, the funding agency supported by Zee, was neither a financial institution nor a banker nor a lending agency.