Business Standard

Third Sebi Report Doesnt Bare Much On Zee

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BUSINESS STANDARD

The Securities and Exchange Board of India's (Sebi) investigation into the March 2001 market crisis appears to have not made much headway as far as the Zee group is concerned.

The third part of the regulator's report submitted to the joint parliamentary committee today has only one new bit of information. In the private placement deal with Goldman Sachs, Sebi has said the client on whose behalf the shares were purchased was a Hong Kong-based financial institution.

However, Sebi has not named the institution or its promoter. Goldman Sachs had earlier refused to reveal the name, citing client confidentiality.

In fact, the Sebi report has largely given a clean chit to Zee and its promoters in the events leading up to the market crisis.

 

A Zee official said that it was good news for investors if the company was being exonerated of all charges.

The Essel group, which advanced Rs 706.40 crore to Ketan Parekh-related entities, also obtained a firm undertaking from the Parekh group that the broker group would not use the money advanced to purchase shares of Zee Telefilms or any other listed companies of the group.

The department of company affairs has already inspected the books of accounts of Zee -- it is yet to furnish a copy of its inspection report to Sebi, which has asked for it.

The Sebi report revealed that the investment and trading concerns of the Essel Group had given Rs 706.40 crore to the entities related to Ketan Parekh between May 2, 2000 and April 25, 2001.

Of this, Rs 251.55 crore was returned and Rs 454.85 crore is yet to be received. The data available on financial dealings indicate the flow of funds between the two groups started only when the prices of the scrip were descending, and not when vice versa.

According to Sebi's findings, it appears from the submission of the Essel group that the Parekh group did not utilise the funds given to it in part or full for the purpose for which it claimed to have been given.

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First Published: Feb 15 2002 | 12:00 AM IST

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