Subash Chandra has apologised to the investors but can he do something for the retail traders who have invested in the stock where parent company Essel Propack has been found money laundering as per the reports.
Essel Group chairman Subhash Chandra stated that his company is in a financial mess and has blamed the same for the aggressive bets on infra, which has gone out of control since the IL&FS crisis and also the acquisition of Videocon's D2H business.
Zee Group suffered a loss in market capitalisation to the tune of Rs 14,000 crore after the shares of its entertainment arm tanked over 30 per cent in the wake of a media report that said its promoter company Essel Group was allegedly involved in money laundering post-demonetisation.
It also claimed that Nityak Infrapower and a group of alleged shell firms had carried out financial transactions that involved a few companies associated with the Subhash Chandra-led Essel Group between 2015 and 2017.
Zee Entertainment Enterprises shares fell nearly 31 per cent to Rs 299.92 per share on the National Stock Exchange. It was the worst day for the stock for a single day fall since 1999.
The media report also said that Nityank also played a crucial role in a large business deal between the Videocon and Essel groups in November, 2016.
Verdict
It is better to avoid such stocks for the time being and let the dust settle and for God sake donot try to find a value buy in it as these are the stocks which are like a falling knife and one never knows how many more cockroaches are hidden in the stock. As an additional warning also keep away from Essel Propack and DishTV stock which has also imitated the same fall as ZEE Enterprises.
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