Shares of Zee Entertainment Enterprises (Zee) rose more than 5 percent on Thursday after the company issued a clarification regarding a media report that said that the Ministry of Corporate Affairs (MCA) had ordered an inspection of the firm’s books. The stock has lost nearly 12 percent on this news.

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On Thursday, the stock rose as much as 5.4 percent to Rs 239 per share on the NSE. At 10:03 am, the stock was trading 5 percent higher at Rs 238.20 as against a 0.3 percent or 41 points rise in the Nifty index at 12,130.

In the clarification, issued on February 5, the company acknowledged that the MCA is seeking certain information and inspection under Section 206(5) of the Companies Act 2013, but it further added that the information sought by MCA is already available in the public domain.

"We are collating all the desired information and will be providing the same to MCA with an intent to fully cooperate with their inspection. You may note that no conclusion or adverse inference has been drawn by any authority against the Company," Zee said in a BSE filing.

As per the report, the MCA had ordered an inspection of the firm’s books on allegations of corporate governance lapses and also because of the resignations of some of its independent directors.

Independent directors Subodh Kumar and Neharika Vohra had quit the Zee board last year, citing multiple issues including film advances to the tune of over Rs 2,000 crore and receivables from related parties.

"With respect to your query and the price movement, we are not aware of any reason that should cause such price movement in our stock. The press reports seem to speculate that this inquiry was triggered by the resignation of independent directors few months ago, and we cannot fathom any reason for this dated fact to have caused such price movement in the Company's share price," the filing further noted.

It also reiterated that the company has been writing letters to SEBI that some persons have been trying to manipulate our stocks and have been spreading false rumours which have adversely impacted the share price of the company.

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