Government to examine Sebi’s allegations against Zee Entertainment, says report

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The Ministry of Corporate Affairs (MCA) is looking into irregularities in Zee Entertainment Enterprises as alleged by the market regulator Securities and Exchange Board of India (Sebi), ET Now reported on Friday.  

The MCA has reportedly noted the Sebi interim order and will be investigating lapses in corporate governance issues, the report said. 

On June 12, Sebi banned Zee’s Chairman Subhash Chandra and CEO Punit Goenka from holding any board positions in listed companies for a year. The market regulator alleged their active involvement in the diversion of funds to the group’s other listed entities and related firms related to founding shareholders. 

The company, on Friday, said it is not aware of any MCA probe and has not received any such notification from the ministry, Reuters reported on Friday. 

Shares of Zee Entertainment closed at Rs 233.70, down by 0.13 per cent.  

Both Chandra and Goenka moved SAT against the Sebi order. But SAT too restricted him from holding a directorial or key managerial position in a listed company. 

In July, Zee Entertainment said it formed an internal committee to run its operations after Chandra and Goenka failed to overturn the market regulator’s ban on them holding board positions. 

On the other hand, Goenka reportedly told his staff that the much-awaited merger of ZEE Entertainment and Sony has reached an advanced stage of completion, and the issues faced by promoters with Sebi should not become a problem for the company. 

Goenka told his employees that the merger has already been cleared by the Competition Commission of India (CCI), Bombay Stock Exchange (BSE), and National Stock Exchange (NSE), besides the shareholders of the company, Economic Times reported. 

Earlier this week, the National Company Law Appellate Tribunal (NCLAT) on Wednesday deferred the hearing of IDBI Bank’s plea against Zee Entertainment till August 17. IDBI Bank challenged an NCLT order, which had on May 19 rejected its plea to initiate insolvency proceedings against Zee Entertainment.  

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