GECs
Zee scrip spiraling downwards
If anyone thought the Zee Telefilms scrip had finally bottomed out better think again. Down is where it has been plummeting since yesterday. And there seems to be no end to it all. On the day of Zee’s AGM, the share price was hovering between the range of Rs 90 and RS 92. But it seems that the AGM could only dampen the market sentiment, rather than supporting the price.
The reasons attributed to the fall in price are many. The first is pessimistic picture painted by chairman Shubhash Chandra during the AGM. He warned investors that the overall negative market scenario prevailing was going to impact on financials as companies cut back on advertising. The search for a strategic investor for Zee Telefilms being put on hold only added to the sentiment.
‘Zee has always gone up or down on the ‘news’ and not on fundamentals,’ says an analyst with a foreign equity research firm. Short trading takes place in the script based on the same news, so players normally take positions for short periods of time and immediately exit when there are small fluctuation in the price. The price is simply not allowed to settle down.
The market also seems to be very concerned about the huge outstanding the company has. Even though Chandra has categorically made clear that there will not be any further financial transactions between any Essel Group company and Zee Telefilms, the market does not believe that, opined one analyst. ‘Zee has always made such commitments which were later not kept. There are various items which are waived off in the financial statements at the end of the year. And this is possible in this case also.’ The market is concerned about the amount (close to RS 900 million) that is still to be paid by Essel Group to Zee and the close to RS 1 billion to be received from Buddha Films.
The recent relaunch exercise hasn’t fetched much results. Apart from Baazi Kiski and Nilaam Ghar, which are game shows, other soaps are not doing that well. “It’s been almost a month and half, and the shows are not yet picking up. Dailies should not take that long to show the results.” As far as the new programmes go, most analysts were of the opinion that a few shows like Choti Maa, Sarhadein and Koi Apna Saa were really good and should be developed.
As for the movement of the scrip on the bourses today, it (up 4.94% to RS 74.30) bounced back on renewed buying interest after Monday’s fall. The stock shed 10% on Monday amid fears of a slowdown in earnings, and a possible delay in the induction of a strategic partner by the company.
GECs
Sebi sends show-cause notice to Zee over fund diversion, company responds
Regulator questions 2018 letter of comfort and governance lapses; company vows robust legal response
MUMBAI: India’s markets watchdog has reignited its long-running scrutiny of Zee Entertainment Enterprises, issuing a sweeping show-cause notice that drags the broadcaster and 84 others into a widening governance storm.
The notice, dated February 12, has been served by the Securities and Exchange Board of India to Zee, chairman emeritus Subhash Chandra and managing director and chief executive Punit Goenka, among others. At its heart: allegations that company funds were indirectly routed to settle liabilities of entities linked to the Essel Group.
The regulator’s probe traces its roots to November 2019, when two independent directors resigned from Zee’s board, flagging concerns over the alleged appropriation of fixed deposits by Yes Bank. The deposits were reportedly adjusted against loans extended to Essel Group entities, triggering questions about related-party dealings and board oversight.
A key flashpoint is a letter of comfort dated September 4, 2018, issued by Subhash Chandra in his dual capacity as chairman of Zee and the Essel Group. The document, linked to credit facilities availed by certain group companies from Yes Bank, was allegedly known only to select members of management and not disclosed to the full board—an omission SEBI believes raises red flags over transparency and governance controls.
Zee has pushed back hard. In a statement, the company said it “strongly refutes” the allegations against it and its board members and will file a detailed response. It expressed confidence that SEBI would conduct a fair review and signalled readiness to pursue all legal remedies to protect shareholder interests.
The notice marks the latest twist in a saga that has shadowed the broadcaster since 2019. What began as boardroom unease has morphed into a full-blown regulatory confrontation. The final reckoning now rests with SEBI—but the reputational stakes for Zee, and the message for India Inc on governance discipline, could scarcely be higher.
