Tree House comes crumbling down
On 16th December, the news had appeared about the financial mess further worsening for Tree House and that due to this, it has had to shut down 110 branches across India and has paid salaries to teachers for months. Following this news report, Zee Learn called it quits and decided to pull out of the proposed merger and has threatened legal action to see damages on account of the failed deal.
Tree House has reverted with the clarification sought on this news only today morning. While it remained mum on the closing down of the branches; instead it has said that this news was “some disgruntled elements against whom the company is adopting legal steps.” So we do not really know if the branches have bene shut down or not.
But it has come down very strongly on Zee Learn puling out, making very serious allegations. It has said that the company has filed a complaint against the Essel group and called it a “fraud.” Tree House has said that the exit of Zee Learn was a part of the conspiracy of the Essel group to destroy competition from Tree House. They say that the so called complaints from parents are all by and large engineered by employees of Essel group. The company said that the “so called financial mess” is really not a mess but an “artificial scarcity” created by the officers of the Essel group who had illegally attempted to take over the company.
This is not a good development at all and looks like this will be a long drawn legal battle. Tree House breached the 20% UC and hit a new low of 16th Dec at Rs.23.85 and today too, it has breached the 20% UC and hit another new low at Rs.19.10. Zee Learn is also down in the red at Rs.38.85, down some 3%.