ZEEL Shares Plunges Amid New SEBI Scrutiny

Shares of Zee Entertainment Enterprises (ZEEL) slipped further into Monday morning, under the shadow of Securities and Exchange Board of India's (SEBI) decision to dismiss settlement applications submitted by the company and CEO Punit Goenka.

The market regulator announced additional investigation into alleged violations of its regulations, compelling SEBI to subsume previous allegations against ZEEL with new findings. As a result, content from show cause notices dated July 6, 2022 will be incorporated in the subsequent report from SEBI.

According to the notice issued by SEBI on Monday, all information including examination reports and relied-upon documents will now form part of a broader investigation into ZEEL's allegations of non-compliance with its regulations. Additionally, SEBI confirmed that proceedings against those mentioned in notices will be dropped in light of new findings.

The Securities Board of India issued the warning letter to ZEEL, CEO Punit Goenka and other officials last July after noticing suspicious transactions and violations under relevant laws. In line with regulatory procedures, the authority allowed all related parties to submit settlement applications.

Since the news came out on Monday morning, the stock price experienced a 10 per cent decline in one week’s period. Throughout six months, also fell down by nearly two percent. Zee Entertainment Enterprises share shares fell sharply by about ten percent this past month which follows losses due to recent investments and restructuring. Over the last few days ahead of company's Q3 financial results, broker Elara Securities predicted that ZEEL could see a margin decline to 14.5 per cent by the third quarter of the year. It also anticipates the overall impact of Zee5 will show minor fluctuations throughout this period.