Showbiz stocks crash on fears of underworld links

As the police re-write the script of Chori Chori Chupke Chupke, entertainment stocks on the Bombay Stock Exchange (BSE) tumbled like nine pins, last week, with market operators fearing more arrests after that of producer Nazim Rizvi on Wednesday. Film financier 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, Subhash 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 are riding a bull wave and secured good ratings from the markets despite not-so-good fundamentals.

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