Entertainment stocks crash on fears of underworld links

Entertainment stocks crash on fears of underworld links
ENS ECONOMIC BUREAU

December 15: As the police re-write the script of Chori Chori Chupke Chupke, entertainment stocks on the Bombay Stock Exchange (BSE) tumbled like nine pins today with market operators fearing more arrests after that of producer Nazim Rizvi on Wednesday. Film financer Bharat Shah, who was questioned by the Mumbai police to probe underworld links today, is a major investor in Bollywood scrips.

``Any setback to Shah will spill on to entertainment stocks as he has invested heavily on behalf of others,'' a BSE broker explains, adding that the police are now investigating these ``other investors''.

Led by Zee Telefilms, which closed at Rs 297.15 against Rs 328 on Thursday, Jeetendra's Balaji Telefilms, Subash Ghai's Mukta Arts, and music firm Tips Industries fell by eight per cent.

Shah has sunk vast sums into Bollywood entertainment stocks along with `Big Bull' Ketan Parekh. In fact, Parekh had pledged his shares with Shah and borrowed money to prop them up. As Shah is being questioned by the police for bankrolling films linked to underworld money, Parekh had to disinvest in the shares to avoid controversy.

As a result, the BSE sensex fell by 133 points on Friday. Brokers say the markets also fell due to a sharp fall in the Nasdaq on Thursday.

Till date, most Bollywood scrips were riding a bull wave and secured good ratings from the markets despite not-so-good fundamentals. In fact, Amitabh Bachcan' AB Corp, which was with the Board of Industrial and Financial Reconstruction till recently, was planning a public issue to raise funds to cash in on the craze of entertainemnt stocks.

``The police should probe who were the investors in these companies and why these shares were flaring in the last three months despite weak fundamentals,'' a broker remarks.