Zee Entertainment Limited experienced a significant decline in its share value, dropping 14.3% to Rs 165.5 on the BSE, triggered by a Bloomberg report on February 21. The report revealed a Securities and Exchange Board of India (SEBI) investigation, which found an alleged diversion of around $241 million from the company. This figure is notably higher than initial estimates by SEBI investigators.
The regulatory body has also called upon Zee’s founders, Subhash Chandra and his son Punit Goenka, along with several board members, for explanations regarding the alleged financial irregularities. Despite these claims, Zee has strongly denied the accusations of an ‘accounting hole’ of $240 million or Rs 2,000 crore, as reported by Reuters, labeling these allegations as incorrect and baseless.
Zee’s shares have suffered a steep decline, exacerbated by the fallout of a proposed merger with Sony Group Corp’s India unit, leading to a 30% year-to-date drop in stock value. However, following a clarification from Zee on a report by The Economic Times about potential renewed merger talks with Sony – which Zee described as incorrect – the company’s stock saw an over 10% increase on Tuesday.
