HC stays Zee groups takeover bid for UNI

New Delhi, Sept 29 | Updated: Sep 30 2006, 05:30am hrs
The Delhi High Court on Friday ordered maintaining of status quo till October 5 on a suit seeking a permanent injunction against the United News of India (UNI) from transferring its shares to Mediavest (Own by Subash Chandras Zee group), any other company or individuals.

Justice Rekha Sharma passed the injunction order on a complaint from Bhopal-based newspaper group Sandhya Prakash Ltd (SPL), which challenged the reported transfer of UNI's ownership rights to Mediavest on the ground it was illegal, fradulent, arbitary and lacked transparency.

The court issued notices to the respondents to file their replies and posted the matter for further hearing to October 5. Counsel Rajiv Bansal appearing for plaintiff company alleged that the UNI management had transferred the shares to Mediavest overlooking the claim of SPL which happened to be the highest bidder offering Rs 40 crore for the takeover transaction as against the Rs 32 crore offered by the rival bidder.

Moreover, Bansal alleged that the transfer of shares to Mediavest reportedly affected on August 31, 2006 was illegal and fradulent as the said company was neither an owner nor owners of newspapers in India as stipulated in the articles of association of UNI.

According to SPL, the takeover bid by Mediavest was made with the intention of strengthening and adding value to the DNA newspaper, which has been launched by the Essel and Bhaskar Group.

Quoting news reports, SPL alleged that the Essel Group proposed to close down UNI as a news agency and instead plans to use the infrastructure exclusively for DNA, in which the group has investment interests.