ZEEL shares fall 14 per cent as Subhash Chandra insolvency case moves to NCLAT

MUMBAI: Zee’s stock is taking a legal hit, and investors are feeling the fallout. Zee Entertainment Enterprises Ltd (ZEEL) shares extended their decline for a fourth consecutive trading session on Monday as the dispute over founder Subhash Chandra’s personal insolvency resolution moves to the National Company Law Appellate Tribunal (NCLAT).

The stock fell as much as 14.3 per cent to Rs 87 during intraday trade before recovering some ground. At 11 am, ZEEL was down 9.5 per cent at Rs 91.87, after touching an intraday low of Rs 86.90. By 12:33 pm, the shares were trading at Rs 93.27, down 8.12 per cent from the previous close of Rs 101.51.

The selling comes after the National Company Law Tribunal (NCLT) approved a repayment plan on August 25 in Chandra’s personal insolvency proceedings. Canara Bank, Union Bank of India and LIC Housing Finance have decided to challenge the order before NCLAT, while HDFC Bank is also considering an appeal.

At the centre of the dispute is a repayment proposal of just Rs 6.25 crore for creditors, with another Rs 25 lakh set aside for insolvency-process costs. That compares with admitted creditor claims of approximately Rs 22,006.57 crore, implying a haircut of nearly 99.97 per cent.

The three lenders challenging the order collectively held 8.45 per cent of the voting share in the insolvency proceedings and had voted against the plan. LIC Housing Finance accounted for 6.09 per cent, Canara Bank 1.60 per cent and Union Bank of India 0.76 per cent.

The plan was approved after creditors representing 80.81 per cent of the voting share backed it.

The dissenting lenders have raised objections to both the repayment plan and the insolvency process. Some creditors had also sought a forensic audit and asset-tracing exercise, while questioning the participation of certain entities in the voting process.

For ZEEL shareholders, the legal overhang adds to an already weak run. The stock has fallen 19.62 per cent over the past year, against a 52-week high of Rs 121.80 and a 52-week low of Rs 68. At Rs 93.27, it remains 37.16 per cent above its 52-week low.

Importantly, the insolvency proceedings relate to Chandra in his personal capacity and are separate from ZEEL’s own corporate insolvency status. The case has nevertheless attracted investor attention because of Chandra’s association with the Zee group and the substantial financial obligations involved.

With the NCLT’s August 25 approval now facing challenges from financial creditors, the dispute has moved to the appellate tribunal. The NCLAT proceedings will determine whether the approved repayment plan holds or faces further judicial scrutiny.