MUMBAI: Zee Telefilms Ltd has asked the promoters of Padmalaya Enterprises Private Ltd (PEPL) to pay Rs 590 million to buy out their entire shares in the subsidiary company.

This follows Zee's decision to exit from Padmalaya following the controversial transfer of shares in the listed company Padmalaya Telefilms Ltd (PTL).

"Zee had invested Rs 590 million in the Padmalaya deal and we want to recover that cost. This includes the open offer that we had to make at that time," says a source in Zee Telefilms.

Zee is in advanced stage of negotiations with Padmalaya promoters and hopes to come to an agreement next week, the source added. Zee has 64 per cent stake in PEPL and has decided to sell its entire stake in the company. PEPL held a 50.3 per cent controlling stake in PTL.

A senior Zee official is in Hyderabad to finalise the deal with Padmalaya promoters. Zee is expected to recover Rs 590 million from sale of property by PEPL. Though the deal for purchase of Zee shares in Padmalaya was expected to be signed on Saturday, the Zee source said that it would be extended to next week.

Zee had threatened to take legal action against the PEPL promoters for "misappropriation of substantial shares" that its subsidiary PEPL held in PTL. But Padmalaya promoters made an offer to buy out Zee's stake in PEPL in exchange for immovable property.

Zee had earlier accused Padmalaya founder-promoter GA Seshagiri Rao, along with his relatives, of pledging PEPL's shares in PTL to raise loans without the knowledge of the board. As a result of the misappropriation, PEPL's holding in PTL has dropped from 50.3 per cent to