Mumbai: Zee Entertainment Enterprises has filed a settlement application with the Securities and Exchange Board of India (Sebi) to resolve the markets regulator’s ongoing investigations into alleged corporate governance lapses and financial irregularities involving the media and entertainment company’s promoters.
The application, submitted on Thursday without admitting or denying the allegations, is part of a process under Sebi’s settlement regulations, which allow companies to reach an agreement with the regulator. This involves paying a fine or taking corrective actions in exchange for closing the probe.
“It has been observed that Sebi believes that the disclosure of financial information and the business transaction in ZEEL have been dealt in a manner which may be detrimental to the investors or the securities market during the investigation period,” the company said in its settlement application.
“In order to bring closure to apprehensions raised in interim order, summons and various communications and to repose the faith of the investors (constituting ~96% public investors) in the company, it has been decided by the board to file the present settlement application for cordial resolution,” it said. Sebi’s probe into Zee began after concerns were raised over corporate governance issues, financial mismanagement, and potential securities law violations.
The probe has largely focused on Zee’s promoter family, including its managing director and CEO Punit Goenka and chairman emeritus Subhash Chandra, who are accused of diverting company funds and engaging in undisclosed related-party transactions.
In 2023, Sebi issued interim and confirmatory orders that barred the father-son duo from holding key positions in any listed company, including Zee Entertainment Enterprises.
Punit obtained relief from the securities appellate tribunal (SAT), allowing him to continue as MD and CEO of the company. Chandra has also challenged the Sebi order before the SAT.
A Zee spokesperson referred to the company’s recent press release, stating that the board had advised proactively settling any pending adjudication proceedings with Sebi in a timely manner, prioritising the interests of shareholders and stakeholders. This advice came after the company’s independent investigation committee submitted its report on allegations of irregularities against the promoters, which found no wrongdoing.
