Shares of Zee Entertainment Enterprises fell 6.5 percent on Tuesday, June 13, following an announcement by the Securities and Exchange Board of India (SEBI).
The SEBI imposed a ban on Subhash Chandra, the Chairman of Essel Group, and Punit Goenka, the Chief Executive Officer (CEO) of Zee Entertainment Enterprises (ZEEL), restricting them from holding any director or key managerial personnel positions in any listed company or its subsidiaries until further notice.
This action was taken due to allegations of their misuse of positions within the company and siphoning off funds for personal gain.
During Tuesday’s trade, the stock opened at a price of Rs. 185 per share against the previous close of Rs. 194.85 and dipped further during the early trading session to touch an intraday low of Rs. 182 per share.
It was trading at ₹191.20, down by 1.87 percent, at 10:35 a.m. on the NSE.
The stock touched a 52-week high of Rs. 287 on October 06, 2022 and a 52-week low of Rs. 175.55 on May 26, 2023, indicating that at the current level, the stock is trading 8.9 percent above its 52-week low and 33.3 percent below its 52-week high.
The stock has declined by over 26 percent in the last six months. Moreover, it has given a negative return of nearly 15 percent in the past one year. Furthermore, the stock has dropped almost 65 percent in the last five years.
An investigation was initiated in November 2019 after the resignation of two independent directors of Zee Entertainment, Sunil Kumar and Neharika Vohra. They had raised concerns regarding the misappropriation of Zee's fixed deposit by Yes Bank to settle a loan taken by related entities of the company.
The SEBI probe revealed that Subhash Chandra had issued a "Letter of Comfort" for a ₹200 crore loan to Essel Group Mobility, using the fixed deposit as collateral.
Yes Bank settled the loans of seven associate companies using this amount. These seven companies were owned by family members of Subhash Chandra and Punit Goenka, the CEO of Zee Entertainment.
The investigation further uncovered that the returned money, which Zee claimed to have been returned by the associate companies, actually belonged to Zee and was routed through various other companies to create the appearance of repayment.
The interim order, which is expected to be contested by the promoters, is being considered as a significant setback for the company. This order has been issued at a crucial juncture when the company is in the process of obtaining regulatory clearances for its merger with Sony Pictures Networks India.
Zee Entertainment Enterprises Limited is an India-based company, which is engaged in the business of media and entertainment. It is involved in the business of broadcasting general entertainment television channels, such as non-news and current affairs television.
According to a MintGenie poll, 21 analysts on an average have a ‘BUY’ call on the stock.
