Why Zee Group Stocks Tumbled
Why shares of Zee Group companies fell more than 19 percent today.
The market capitalisation of Zee Group companies eroded nearly Rs 14,000 crore after a report said its controlling shareholder Essel Group’s name emerged in a probe linked to large deposits made after demonetisation.
The Serious Fraud Investigation Office is probing a company—Nityank Infrapower (formerly Dreamline Manpower)—for deposits of over Rs 3,000 crore made just after Prime Minister Narendra Modi outlawed old Rs 500 and Rs 1,000 notes in November 2016, news website The Wire reported. Its investigation showed that Nityank Infrapower and a group of alleged shell firms had carried out financial transactions that involved a few firms associated with the Essel Group of Subhash Chandra between 2015 and 2017, according to the report.
“I’m as surprised as many people would be. Essel Propack is nowhere in the picture of any of these allegations,” said Vice Chairman and Managing Director Ashok Goel told BloombergQuint. “I’m surprised why Essel Propack stock is getting hammered. There is also zero promoter pledge.”
Shares of broadcaster Zee Entertainment Enterprises Ltd. fell 26.6 percent to Rs 318.4 apiece, its biggest single-day fall since its listing in November 1993.