Pre-school chain operator Tree House Education and Accessories Ltd. threatened to take legal action against Essel Group's education unit Zee Learn Ltd., after the latter called off a proposed merger.
“The Essel Group has played a fraud upon the company and its promoters,” Tree House said in its filing to the exchanges. Zee's decision to exit the merger “was part of the conspiracy to destroy their competitor,” Tree House added.
The promoters have filed a complaint with the police on December 15, 2016, and December 16, 2016, against Essel Group. The promoters are in the process of collecting detailed information.Tree House's Exchange Filing
In August, boards of both the companies approved a revised share swap ratio for the planned merger, which was initially announced in December 2015.
However, the deal got terminated after media reports suggested Tree House had closed down over 110 centres across the country amid allegations of non-payment of salaries to teachers for months.
“The board feels this may change the complete business dynamics of Tree House and is not in the spirit of scheme of amalgamation between ZLL and Tree House,” Zee Learn said in a statement on Friday.
Tree House dismissed the reports, saying that the “so called complaints by parents are all by and large engineered by employees of the Essel Group.”
The so called financial mess of the company is really not a mess but artificial scarcity created by officers of Essel Group who had illegally attempted to take over the company.Tree House's Exchange Filing
Zee Learn shares were trading 2.9 percent lower at Rs 38.90 per share as of 11:00 a.m., while Tree House hit the 20 percent lower circuit in morning trades.
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