Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises, has moved the Securities Appellate Tribunal (SAT), challenging the Securities & Exchange Board of India’s (Sebi) confirmatory order issued last year that banned him from holding directorships in any listed entity, over allegations of funds siphoning.
Chandra had earlier filed an appeal related to the alleged fund diversion case. SAT has now asked SEBI to file a reply to the appeal within 10 days.
Chandra has asked for a stay on the order by SEBI issued on August 14, 2023. The SAT had granted relief to Zee Entertainment Enterprises Limited managing director and chief executive officer Punit Geonka, Chandra’s son in the same chase.
Business Standard reported that SEBI’s legal counsel stated that Chandra is “not cooperating” with the investigations and has repeatedly requested for additional time to submit documents. SEBI had sent summons on January 12. However, Chandra has failed to submit any documents till now.
Last week it was reported that SEBI had summoned several current and former directors of Zee Entertainment Enterprises Ltd (ZEEL) as part of its probe into the entertainment company over the alleged diversion of company funds, through related-party transactions.
The regulator has also widened the scope of the investigation. SEBI is also looking into the role of two prominent Mumbai-based production houses as possible “conduits which were used to siphon off funds,” a Moneycontrol report quoted sources.
The regulator is also probing a wider array of transactions between Zee and private companies owned by promoters. “Some of the former directors, including the independent directors, have received communication to appear before Sebi. They have also been asked to provide certain documents pertaining to the period when they were on the board of the company,” Moneycontrol reported, quoting the above-mentioned sources.
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In August 2023, SEBI passed an interim order against promoters Subhash Chandra and his son Punit Goenka, barring them from holding any directorships in listed companies, over allegations of funds siphoning.
The proposed Zee-Sony merger, once expected to create a huge media company worth $10 billion, collapsed in January 2024, the possibility of its revival emerged last week after reports of on-going negotiations surfaced. Zee swiftly denied these.
In the same week, SEBI, discovered a significant discrepancy of over $240 million in the accounts of Zee Entertainment Enterprises Ltd, according to reports.
The regulatory body’s investigation into Zee founders, primarily focusing on Subhash Chandra and Punit Goenka, reportedly uncovered the potential diversion of approximately $241 million from the company. This figure is roughly ten times larger than SEBI’s initial estimates, raising concerns about financial irregularities within Zee.
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