The market value of Zee Group companies saw nearly Rs 14,000 crore loss after a report said its controlling shareholder Essel Group’s name emerged in a probe linked to large deposits made after demonetisation.
As a result, Zee Entertainment shares fell 26.6 percent. It is the biggest single-day fall since its listing in November 1993.
The Serious Fraud Investigation Office (SFIO) is probing a company—Nityank Infrapower for deposits of over Rs 3,000 crore made just after PM Narendra Modi announced demonetisation of old Rs 500 and Rs 1,000 notes in November 2016, news website The Wire reported. The investigation had revealed that Nityank Infrapower and a group of alleged firms had carried out financial transactions that involved a few firms associated with the Essel Group of Subhash Chandra between 2015 and 2017, according to the report.
Experts said that while Subash Chandra claimed the fundamentals of his flagship company are intact, this will create a sense of panic and Chandra could be staring at the possibility of losing control of the company. Chandra said that “all operating companies, especially our most precious one which is Zee Entertainment, are performing exceptionally well and are under no stress whatsoever. The debt burden is purely at the promoter level, which is reflecting negatively on the companies.”
“I’m as surprised as many people would be. Essel Propack is nowhere in the picture of any of these allegations,” said Vice Chairman and Managing Director Ashok Goel in a recent interview with BloombergQUint. “I’m surprised why Essel Propack stock is getting hammered. There is also zero promoter pledge.” he added.
Shares of Zee Learn Ltd. fell 19.6 percent, its worst intraday fall. Essel Propack Ltd. and Dish TV India Ltd. plunged 18.6 percent and 21.2 percent, respectively.