Zee Entertainment chairman Subhash Chandra.
According to sources, the Securities and Exchange Board of India (SEBI) is gearing up to interrogate the top leadership of Zee Entertainment Enterprises, including founder Subhash Chandra and Chief Executive Officer and Managing Director Punit Goenka, regarding allegations of fund diversion within the media company. The regulatory body’s inquiry, slated to conclude by mid-April, is part of an ongoing investigation.
Last June, SEBI announced that ₹200 crore from Zee had been diverted through related party transactions. However, Zee contested this assertion before the Securities Appellate Tribunal (SAT). Subsequently, SEBI informed the tribunal of a broader investigation, revealing that Subhash Chandra had issued a letter of comfort for ₹4,210 crore in his capacity as chairman of Essel Group.
The tribunal’s order noted, “It was argued that an additional eight months were necessary to finalize the broader investigation, as SEBI has identified a significant number of transactions – amounting to ₹2,000 crore – involving companies linked to the promoters.”
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What is SEBI investigating for now?
SEBI, the market regulator, is currently scrutinizing extensive documentation including thousands of pages of transactions, bank statements, agreements, partnership deeds, and board minutes, as stated by an individual to the Economic Times following a report by Bloomberg. The report suggests that Sebi has uncovered around $241 million that may have been diverted by the promoters of the company.
Responding to the report, a spokesperson for Zee refuted any claims of accounting irregularities within the company, dismissing them as inaccurate and baseless rumors. In light of the Securities Appellate Tribunal’s (SAT) order, which provided relief to the current key managerial personnel (KMP), Zee asserts that it has been diligently cooperating with SEBI’s inquiries, providing all requested comments, information, and explanations. The company emphasizes its commitment to transparency and compliance with regulatory authorities on all fronts.
