Stock Market Today: Zee Entertainment share price climbed more than 8% on Wednesday’s morning trade in response to news reports that stated Sony had no plans to withdraw from the merger despite suspicions of financial diversion levelled against its founders Subhash Chandra and Punit Goenka by India’s markets regulator.
Zee Entertainment shares opened at an intraday low of ₹176 and rose to an intraday high of ₹188.35. Following worries about a merger with Sony post Securities and Exchange Board of India’s (SEBI) recent order against Subhash Chandra and Punit Goenka, the stock has lost 7.4% in the last two trading days. On Tuesday, the stock hit a new 52-week low.
At 13:16 IST, the stock was trading at ₹181.10 apiece, up 4.5% on BSE.
According to Reuters, Sony Pictures Entertainment later said during Wednesday’s session that it took the Indian markets regulator’s order prohibiting Zee Entertainment’s founder and CEO from holding board positions’seriously’ and that it will continue to monitor developments that may affect its deal with Zee.
This was Sony’s first statement following the Securities and Exchange Board of India’s (SEBI) year-long ban last week on Zee Group Chairman Subhash Chandra and CEO Punit Goenka, who were accused of aggressively diverting corporate funds to the group’s associated firms, according to the Reuters report.
Sony, Zee merger on despite Sebi shadow
As per various media reports, Ravi Ahuja, Sony Pictures Entertainment’s head of global television studios and corporate development, gave a two-hour presentation to the board of parent Sony Corp. in Tokyo on Tuesday, taking note of the continuing developments and possibilities of India’s largest media and entertainment agreement.
Zee has filed an appeal against Sebi’s order with the Securities Appellate Tribunal (SAT), which will hear the case on June 26. As per CNBC TV18 news report, the two groups approved an alternative strategy in a series of interactions over the last week in case the worst-case scenario occurs.
In a recent report, global brokerage BofA Securities stated that the ongoing inquiry by SEBI continues to heighten the corporate governance overhang on Zee. The brokerage claimed that it has no rating on Zee because it does not know whether or not the deal will go through. If Zee promoters are successful in obtaining a stay on the SEBI ruling and the merger is completed, the stock may re-rate on hopes of improved governance and synergies from the merged business.
‘Monitoring regulatory developments against Zee,’ says Sony
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Updated: 21 Jun 2023, 01:19 PM IST