B4U Network Television today said it has issued a legal notice to Zee Telefilms seeking an explanation from the Subhash Chandra promoted company regarding claims that it had acquired a 15 per cent stake in B4U.

B4U CEO Ravi Gupta says his company is seeking an explanation from Zee as to when the transactions that they claimed they made took place and if there was any attempt to buy into B4U, why it was done in such a surreptitious manner. "Why didn't Zee approach us directly if as they claim they wanted to buy a stake in our company. We view this whole episode as a hostile act on the part of Zee," Gupta says.

Queried as to whether any compensation had been sought, Gupta replied in the negative. "We will wait and see how they respond but we expect at least a public apology," Gupta said, when asked what his next course of action would be.

The controversy arose after Zee officials claimed on Tuesday to have advanced Rs 2,200 million to several companies, of which B4U was just one, linked to major bull operator Ketan Parekh.

Parekh is currently in the custody of the Central Bureau of Investigation, India's premier investigating agency, for his alleged central role in a still unravelling financial scandal which has caused the collapse of the stock markets.

According to reports, the funds for Zee's transactions were borrowed from Global Trust Bank, another entity suspected to be linked to the scandal. Zee has said it acquired 28.5 per cent in AB Corp (Amitabh Bachchan Corporation) and 15 per cent in B4U as part of a long term strategic initiative.

Meanwhile, the Zee scrip continues its downward slide. The stock had only sellers at the counter. The scrip ended at RS 84.50 at the close of the day's trading.