Tree House Education & Accessories is locked in lower circuit for the second straight day, down 20% at Rs 19.10, its new low on the BSE.
The trading volume have jumped five-fold, with a combined 4.82 million shares changing hands till 10am. There were pending sell orders for 767,315 shares on the BSE and NSE.
The Essel Group promoted Zee Learn on Friday informed the exchanges that they have called off their proposed merger with the company.
Zee Learn (ZLL) said that the board took cognizance of the recent adverse media reports of Tree House closing down hundreds of its playgroup centres abruptly leaving parents / students high and dry and of many parents filing police complaints against Tree House and its Promoters.
The Board feels that this may change the complete business dynamics of Tree House and is not in the spirit of the Scheme of Amalgamation signed between ZLL and Tree House, it added.
This fact coupled with the steadily deteriorating financials of Tree House, allegations of irregularities by Tree House / its Promoters and the need to protect the interest of ZLL shareholders, led to the Board of ZLL to unanimously agree to withdraw from the merger process with Tree House.
As a clarification on the news report, Tree House on Monday informed the stock exchanges that the said article has been misreported, and that it had been engineered by some disgruntled elements against whom the promoters and the company are adopting appropriate legal steps.
The exit of the Essel group (Zee Learn) was part of their conspiracy to destroy their competitor the Tree House. The so called financial mess of the company is really not a mess but artificial scarcity created by officers of Essel group who had illegally attempted to take over the company, it added. LINK
The stock of Zee Learn, too, was trading 3% down at Rs 39, falling 8% from its early morning high of Rs 42.45 touched on BSE. It hit an intra-day low of Rs 38.55 so far. A combined 1.09 million shares changed hands on the BSE and NSE.