A day after the Subhash Chandra-led Essel Group said mutual funds from which it borrowed money "unanimously" decided to grant it more time for repayments, market regulator SEBI has ruled out any provision of giving an extension to repay debt, said a media report.
Securities and Exchange Board of India (SEBI) chairman Ajay Tyagi said that regulations do not allow any form of standstill arrangements, said a report in Moneycontrol.
Tyagi's comments indicated that the market regulator is not happy with the decision of the mutual fund houses to grant more time to Zee Entertainment Enterprises (ZEEL), a subsidiary of Essel Group, said the report.
"We don’t know if entities are following the right regulations on standstill arrangements," Tyagi was quoted as saying in the report.
On Wednesday, Essel Group said mutual funds from which it borrowed money "unanimously" decided to grant it more time for repayments.
In a statement that comes amid media reports of a few fund houses selling their holdings in the company ahead of the 30 September deadline, the group did not specify the mutual funds which have supported it, or the amount due.
cluding infrastructure, roads and power, by pledging their holdings of ZEEL. A majority of these bets went awry and the liquidity crisis created by the collapse of IL&FS made it difficult to refinance the debt.
Simultaneously, bears mauled the ZEEL scrip as well, triggering a piquant situation where the value of security held by the lenders went down. In the face of the troubles, and with a view to protect the value, nearly the dozen MFs decided to give Essel more time.
The sell-off in the ZEEL shares was termed as sabotage by the promoters.
— With inputs from agencies
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Updated Date: Sep 26, 2019 16:04:23 IST