Zee shares decline 5% as case against Sebi drags on

The share price of Zee Entertainment Enterprises fell over 5 percent on June 20, a day after the Securities Appellate Tribunal (SAT) adjourned the Zee plea against a Sebi order till June 26, delaying the entertainment major’s merger with Sony Pictures Networks India, which is expected to be a key re-rating trigger for the stock. At 12:45pm, the Zee stock was quoting at Rs 175.15 on the NSE, down by 5.45 percent from previous close. Trading volumes at 17.6 million shares at the time were also higher than 20-day average volume of 11.4 million shares. Follow our live blog for all the market action Sebi took action against Essel Group Chairman Subhash Chandra and Punit Goenka last week, alleging that the Rs 200 crore repaid to Zee by seven borrowing entities actually originated from Zee and the company did not receive any funds. The entries were just ‘book entries’. The markets regulator has barred the father-son duo from holding any key managerial positions. Also Read: In five charts: How ZEEL’s funds were routed back to itself, according to Sebi As Zee has approached SAT against the Sebi order, its counsel said that the books of Zee were not cooked and these were not just ‘book entries’. The counsel has also asked for a stay on Sebi’s interim order. The counsel further said that the Rs 200 crore was returned by the borrowing entities to ZEEL and the company also informed the same in 2019 through a corporate announcement. “It is beyond our comprehension as to why the present matter is being re-investigated/re-examined when the cause of action pertaining to the matter is around four years old,” Zee stated. Now, Goenka is slated to be the MD and CEO of the Zee-Sony merged company, as per the scheme of arrangement. As the case drags on, the proposed merger faces more roadblocks. “While Sebi’s order is unlikely to create any legal impediment to the merger, it may dampen the general mood, as necessary changes in the scheme would have to be made since Punit Goenka would not be able to hold any key managerial position in the merged entity,” Vipul Jai, a partner at PSL Advocates and Solicitors, told Storyboard 18. Zee shares are now down 50 percent from their high following the September 2021 merger announcement. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol