The Subhash Chandra-controlled Zee Telefilms has decided to initiate legal action against Padmalaya Telefilms and Padmalaya Enterprises for misappropriation of funds.
The ZTL board has been authorised to take action against G A Sheshagiri Rao, chairman and managing director of Padmalaya Telefilms and Padmalaya Enterprises, who, along with his brother G S R Krishna Murthy and their relatives misappropriated 62.6 lakh (6.26 million) shares to raise loans in their name and their related companies such as Padmalaya Studios and Padamalaya Vision.
As early as August 2004, the irregularities in PEPL and PTL were investigated by chartered accountants. The loans raised on the misappropriated shares were not reflected in the books of accounts of PEPL.
Even the shares held under the Padmalaya Employee Welfare Trust were transferred through depository accounts of PEPL without any consideration accruing to PEPL.
The financial years of 2002 and 2003 also revealed fictitious transactions, which resulted in fudging of accounts.
As a result of the inquiry, PTL's revenue, which was stated at Rs 106 crore (Rs 1.06 billion) with a net profit of Rs 18 crore (Rs 180 million) was scaled down to Rs 94 crore (Rs 940 million) with a net loss of Rs 32 crore (Rs 320 million).Zee Telefilms has decided to take the appropriate civil and criminal action against the persons involved to recover the losses. Padmalaya Enterprises is a subsidiary of Zee Telefilms and holds a major stake in Padmalaya Telefilms.