THEAL: Online Investor Complaint Submission to SEBI SCORES


I have used the information provided by @sivakkri and added other points I thought were relevant to be addressed in the complaint. Please provide your views as I will be officially sending this to the SCORES next week.

Below is how I have arranged the information;


Events in Tree House Education and Accessories (THEAL) and its merger with Zee Learn Ltd (ZLL)

As a THEAL shareholder, I seek SEBI’s assistance and intervention in the events that have transpired at THEAL and ZLL over the past one year which have destroyed investor’s wealth.
Below are the incidents that have taken place that point to possibility of wrongdoings in THEAL.

Fund Raising, Market Cap and High Receivables in THEAL:

  1. December 2014: THEAL raised capital of Rs. 200 crores through QIP (at Rs. 440 per share)

  2. September 2015: Stakeholders Empowerment Services (SES) raises concern due to high receivables in THEAL finance statement. THEAL provides clarification on the same (link below on concern and clarification)

  3. Throughout the year 2015, THEAL had a market cap of around Rs 2000 crore while Zee Learn had a market cap of around Rs 1000 crore.

Questionable Merger of THEAL with ZLL:

  1. 04-December-2015: THEAL Board of Directors accorded in-principle approval for exploring consolidation options with Zee Learn limited

  2. 05-December-2015: THEAL promoters sell 9.5% of their stake for Rs. 202 (33% of the promoter holding)

  3. 23-December-2015 THEAL Board of Directors unanimously approved Scheme of Amalgamation (“Scheme”) between Tree House Education & Accessories Limited and Zee Learn
    (Swap ratio - THEAL shareholders to get 5.3 shares of Zee learn for every share of THEAL)

Irregularities in the Merger decision and events thereafter:

1) There was NO Voting of shareholders regarding the merger with Zee Learn.

2) Previous Performance of THEAL and ZLL (From March,2011 to March, 2015)

  • In March, 2015 THEAL had reported a Sales of Rs 207.5 cr which were almost double than the that of ZLL’s sales of Rs 127.8 cr for the same period.
  • In March, 2015 THEAL had a total debt of Rs 105.82 cr while ZLL had a debt of Rs 329.79 cr, almost 3 times more.
  • In March, 2015, THEAL had Rs 161.37 crore cash on books while ZLL had only Rs 15.6 crores.
  • From March, 2011 to March, 2015, THEAL reported positive Net Profit while ZLL reported losses in 3 of the past 5 years.
  • From March, 2011 to March, 2015 Average OPM, Average NPM and Average ROCE have been 53.1%, 27.6% and 12.6% respectively for THEAL while ZLL has averaged negative for the same financial metrics.
  • Even though THEAL was in a superior financial and operational position compared to ZLL, the merger with ZLL valued THEAL at less than half its market cap and value.


3) Superficial Valuation Report provided to Shareholders.

4) 14 Mar 2016: While the merger is in process, THEAL Promoters pledge 100% of their shares in December, 2015.

5) From December, 2015 to May, 2016, THEAL fails to provide any further details about the merger to its shareholders and there are no updates regarding its progress.

6) 30 May 2016: THEAL reports an unexpectedly bad result for FY2015-2016.

7) 02-June-2016: ZLL decides to keep on hold the merger with THEAL at the agreed upon ratio.

Possibility of fraudulent practices in the Tree House and Zee Learn merger process:

I humbly request SEBI to take the necessary steps for mitigating these issues at THEAL.


Excellent writeup @kunalshirodkar. Appreciate your efforts in doing this. I believe we have more than enough details to open a complaint in SCORES. I would suggest we proceed with submitting these information in SCORES asap (unless you are busy until next week).

I hope you won’t mind other THEAL retail investors using the information you collated while they raise complaint in sebi’s SCORES online complaint system. I’m assuming that most of the THEAL investors in this forum will raise a similar complaint with SCORES.

Request @Donald, @ayushmit and other seniors to guide us here (if you have any inputs/suggestions for THEAL retail investors).

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@sivakkri , I too think the sooner we submit our complaint, the better. No later than Tuesday next week. I was hoping others would have an opportunity to read the content and add/correct any mistakes or omissions.

I will be glad if others use the information we have compiled and use it to submit in SCORES. I am even going to post about the SCORES system on MoneyControl board in case there are other retail investors there who want to see this day light robbery stop!

@sivakkri, @am648, @raviimandi, @ASHISHGUPTA , @rk1771, @BALASAHEB, @hazariwalapu and @Prash Have you guys already submitted your complaint or still in the process? Please feel free to modify the write up I have posted or use the same one while complaining.


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Just informing everyone that I had submitted my complaint in SCORES against THEAL under the Price/Market manipulation category.

I am uploading the actual complaint letter in word format here so rest of you can put your name at the bottom, convert to pdf and submit the document in SCORES.
Events in Tree House Education and Accessories.docx (25.4 KB)

The process is very simple and hardly takes 5 minutes. Let’s see how long it takes to resolve, if it is resolved :pensive:


I also submitted my complaint.


I’m happy that SEBI has taken notice of this. Whether this is due to our complaints or not, I feel satisfied to have played a role by submitting the complaint on June 10th. Thanks to @kunalshirodkar for collecting most of the information. What this shows is that even though most of us are small retail investors, we have the same rights as anyone else invested in the company and if needed we should be ready to fight the wrong doings of management.

@Donald, Need you and other seniors here to promote the education on legal rights of retail investors and to clearly document the various forums like SCORES which are hassle free to register a complaint with SEBI. It would help a great extent if we can promote few threads discussing the legal rights and avenues.

Again my thanks to @kunalshirodkar, @Prash for submitting the complaints. You guys should be proud of doing this, instead of keeping quiet. After all its our hard earned money.

Finally a big “Thank You” to SEBI for taking steps to make sure retail investors rights are protected. Though this is just the beginning of their probe, I hope they take this to a logical closure and make it a point that no other company dare to do such things.

THEAL shareholders, please register with SES to get the report on their view to protect our rights. There is a research report on ZEE, THEAL merger and why they can’t go back on earlier merger terms.


Kudos to all concerned!!
Whereas I have no idea on the merits of the issue/complaint, your initiative deserves attention. I personally did not bother/remain illiterate about such avenues available to small investors. That will change now - with your responsible action.

Everyone, please do note you have a VOICE, should you take the responsibility on. While we may not know if the complaint by itself was enough to prompt a look/action from SEBI, it is still a laudable cause to persist with as the process seems pretty hassle-free. Sivakkri is right, we should put the weight from better-informed investors of a community like VP to bear on such submissions.

If more of us, start being as responsible as @kunalshirodkar, @sivakkri, @Prash and all the others above, it is going to make a difference to the System.

Just a word of caution here - do not take this too far - like becoming an Activist yourself - sometimes here things turn ugly - forward/engage with organisations like MoneyLife (who have the resources/clout to pursue things to logical end)

Well done again!