When Essel Group Founder, Subhash Chandra, came out in the open and apologised to his shareholders after his flagship company, Zee Entertainment's and other group company's stocks tanked last month, industry stalwarts lauded him for owning up to his mistakes. In fact, Zee Entertainment's stock (which had dipped by 26 per cent) saw an overnight revival after Chandra's open letter to his shareholders and as heads of brand valuation companies considered Chandra's move as a great example of crisis mangement. Despite the upheaval in the stock market, the brand gurus didn't really forsee an erosion in the brand value of Zee Entertainment, where Chandra and his family plan to sell 50 per cent of their stake to settle their infrastructure debts.
However, the recent news of market regulator, Securities and Exchange Board of India summoning CEOs of four mutual fund companies to quiz them for punitive action consequent to the enforcement of securities by two lenders last week, has led brand valuation and communications experts to believe that such outrage could tarnish Essel Group and Zee Entertainment's brand value. This means that the statements issued by Chandra that he had reached an agreement with the lenders could be either fradulent or misleading. Chandra has publicly said that he has signed a legal document promising to pay back his lenders by September, and by then the stake sale in his flagship company would be completed. His son, Punit Goenka, MD of Zee Entertainment, has also assured investors that the talks for the strategic sale has been progressing well and that they would be able to complete it well within the deadline. At a time when there is public outcry and outrage, brand experts feel that the Essel Group promoters have to be constantly in touch with their shareholders and lenders and convince them that there are changes that are already happening