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Rajya Sabha MP and chairman of Essel Group (parent company of Zee Media Ltd) Subhash Chandra is facing serious allegations of defrauding banks of crores of rupees through shell companies.
The Managing Director of Playschool chain 'Tree House Education', Rajesh Bhatia has filed an FIR against Subhash Chandra and four others at Mumbai's Khar Police Station. Bhatia alleges that Subhash Chandra and his associates, using shell companies, took bank loans and transferred the public money to foster Chandra’s personal businesses.
News World India has accessed a copy of the FIR. The FIR alleges that Subhash Chandra’s company ZEE Learn has committed fraud with the government and the share markets to acquire the playschool chain Tree House.
According to Rajesh Bhatia's legal counsel Rizwan Merchant, Zee Learn expressed interest in buying 40,000 shares in Tree House and offered to conduct business together. At the same time they illegally used 5 shell companies and tried to take control of the company.
Merchant alleges that Subhash Chandra and his associates have registered several shell companies in Kolkata with fake people as directors. These companies trend circulars in the share market and take large amount of bank loans by showing high turnovers. These companies then transfer the taxpayer’s money granted from banks into other arms of Zee group.
It is alleged in the FIR that Subhash Chandra’s company Zee Limited committed a well-thought-out conspiracy against the Playschool chain Tree House. Zee group officials allegedly registered several shell companies and enlisted them into share market. These shell companies, in order to acquire Tree House Limited, bought their shares on high prices and sold them to others on lower prices. They continued this process over and over to eventually drop the company's high price shares in the market. After successfully dropping the share price of Tree House in the market, Zee Learn Limited demanded a fresh deal based on new share value and refused to go with the pre decided business deal.
According to the lawyer, Zee Learn had initially showed interest in buying the shares for Rs 84 crores, but used shell companies to devaluate the share price of Tree House. When Tree House MD Rajesh Bhatia objected to these wrongdoings, he was allegedly kidnapped and taken to Marathon Building in Mumbai's Lower Parel, where he was thrashed by goons.
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When Rajesh Bhatia went to complaint against the fraud committed with him, the police allegedly denied registering his case. Rajesh then went to the Magistrate and after the Magistrate’s order a case was registered against Subhash Chandra and 4 of his associated under section 156/3 of Indian Penal Code.
According to Rajesh Bhatia's legal counsel, the Economic Offences Wing (EOW) is also probing the case and several shell companies connected to Subhash Chandra have been identified. Merchant says that Subhash Chandra’s Zee Group is using around 200 shell companies to turn their black money into white.
Subhash Chandra had recently filed a petition in Bombay High Court to annul Rajesh Bhatia's FIR. Rizwan Merchant claims that this petition is a ploy to hide Subhash Chandra's real game. He even claims that SEBI (Securities and Exchange Board of India) has all the information on Chandra's wrongdoings but is not taking any action given his position in the upper house of the Parliament.
Prime Minister Narendra Modi is running a nation-wide campaign against black money and corruption. Numerous shell companies turning black money into white are on the Finance Ministry's radar. Merchant claims that the government has identified over 80,000 shell companies, which also includes some of Subhash Chandra's companies.
As a responsible news media organisation, News World India, has sought response from Rajya Sabha MP Subhash Chandra and Zee Learn on Rajesh Bhatia’s allegations but have not received any response as of now. The responses shall be incorporated if and when they are received.