Zee Denies Rumours, Says Audit By Deloitte In Progress; Stock Drops 10%
Zee Entertainment Enterprises Ltd. said the audit of financial statements by Deloitte Haskins & Sells LLP was “very much in progress”, refuting rumours about auditor concerns as its shares fell the most in more than three months.
“We deny the rumours floating in the market relating to audit of the financial statements,” the Subhash Chandra-led group company said in an exchange filing. Deloitte has been its statutory auditor since financial year 2017-18, when it replaced MGB & Co LLP. The company said the audited books will be considered for approval in the board meeting scheduled on May 27.
Shares of Zee Entertainment fell as much as 12.4 percent early on Wednesday, the worst decline since Jan. 25, before paring losses. The stock has tumbled 41 percent in the past 12 months amid investor concerns about the promoter group debt. Essel Group, the controlling shareholders, in November announced plans to sell half its stake in the flagship company to a strategic partner.
Essel Group has said that the stake sale process of Zee Entertainment had reached an advanced stage, while refusing to divulge details citing confidentiality pact.
Mutual funds have agreed to a standstill with the Essel Group on debt and pledged shares. In fact, Kotak Mahindra Asset Management Company told its fixed maturity plan investors that they may not be able to redeem their entire amount because of its exposure to Essel Group. HDFC Mutual Fund rolled over a scheme to delay redemption.