The Zee Telefilms Ltd (ZTL) share continues
to fall on Indian bourses. From a peak of Rs 748 a couple
of months ago, the share last week did trades at Rs 580,
a drop of around 20%. The stock market watchdog, the Securities
Exchange Board of India, has been conducting an inquiry
into the volatility that the Zee Telefilms scrip has been
displaying, following several complaints from investors.
The share price movement of Essel Packaging, another company
promoted by ZTL chairman Subhash Chandra is also being
looked into. Sebi, however, says that there is no prima
facie evidence to indicate that there was any market manipulation
or price rigging in the two shares. It is nevertheless
analyzing data relating to the share as there have been
price fluctuations of 5-7% in a day's trading without
any significant developments in the company.
The ZTL share had flared up from Rs 90
earlier this year to a peak of Rs 748, following rumours
that the company would merge with and manage the Rupert
Murdoch-owned Star TV Indian channels. Industry sources
point fingers at a merchant banking firm, which conducted
a valuation exercise of the two firms, as the source of
the leak to a banking correspondent of a business daily.
A front-paged story in the newspaper, made it appear as
if the merger between ZTL and Star TV had been signed,
sealed and delivered.
Following that first story, the ZTL share
just raced away on the bourses as speculators on the stock
markets and business journalists rode the rumour. ZTL
officials didn't issue any denials in the midst of intense
media speculation. Story after story touted the fact that
the merger would create a media colossus valued at $3
billion. In fact, Chandra appeared on the cover of two
leading Indian business magazines and was hailed as India's
Murdoch. Even International BusinessWeek did a story that
a deal between the two was on.
Star TV officials consistently denied
any knowledge of a merger. Sony TV threw in its bit saying
that it would forge a relationship with Star TV. Finally,
when the situation seemed to be getting out of hand Chandra
issued a denial saying that there was no merger. He said
there were only talks between Murdoch and him relating
to their shareholdings in some of the firms and channels
they own jointly.
Nearly four months after the merger story
leak, there seem to be no signs of the two firms fusing.
Only a weak probe into the wild ride that the ZTL share
has had.
