Tuesday morning trading saw a 6.50 percent decline in Zee Entertainment Enterprises shares after Sebi prohibited Essel Group chairman Subhash Chandra and ZEEL’s Punit Goenka from holding any directorship or crucial managerial position in any listed firm. The stock fell 6.28 percent to Rs 182.60 per share on the BSE following a lackluster start.
It fell 6.59 percent to Rs 182 per share on the NSE. In the broader equity market, the 30-share BSE index rose 328.44 points, or 0.52 percent, to close at 63,053.15.
In an interim order issued on Monday, Sebi prohibited Essel Group chairman Subhash Chandra and ZEEL MD and CEO Punit Goenka from serving as a director or key managerial personnel (KMP) in any publicly traded company for embezzling funds from the media company.
Zee Entertainment shares drop 6.5%.
The case involves Chandra, who was also the chairman of Zee Entertainment Enterprises Ltd (ZEEL) at the time of the alleged violation, and Goenka abusing their positions as directors or KMPs of a publicly traded company in order to embezzle funds for their own benefit.
In its interim order, Sebi noted that Chandra and Goenka transferred the assets of ZEEL and other listed Essel Group companies to their associate entities, which they own and control.
During the period of FY 2018-19 to FY 2022-23, Sebi observed that the share price of ZEEL fell from a high of close to Rs 600 per share to its current price of less than Rs 200 per share. This erosion of wealth, despite the company’s profitability and consistent after-tax profit generation, would indicate that “all was not well with the company.”