Delhi HC Appointed Arbitrator Orders Essel Group Chairman Not To Sell His Unpledged Stake In Zee Until October 16

A Delhi High Court-appointed arbitrator has ordered Essel Group chairman Subhash Chandra not to sell his unpledged stake in Zee Entertainment Enterprises (ZEE) until October 16.

The decision concerns an ongoing dispute with Indiabulls Housing Finance over default in repayment of loans worth 200 crore.

The recent order restrains Chandra from selling, directly or indirectly, shares of ZEE until October 16, which is also the date of the next hearing of the case.

Though the order has exempted ZEE shares already pledged with non-banking finance companies or mutual funds, it is likely to complicate matters for these lenders who seek to recover their money.

Earlier, the Essel Group, which owns ZEE, had reached an agreement in January under which the lenders agreed not to sell Zee shares pledged with them until September 30 and gave Essel time to find a buyer for a portion of Chandra's stake.

Recently, the Essel Group transferred Rs 4,000 crore to lenders after selling 11% of the promoter stake in ZEE to Invesco-Oppenheimer. The group was also in discussions with other buyers to sell around 8% of its stake and repay its lenders in full.

However, arbitrator’s order is likely to complicate that process.

It may be recalled that Indiabulls had moved the Delhi High Court in December 2018 after Essel promoter firms defaulted on repayment of loans.