Sebi rejects settlement demands of ZEE, Punit Goenka; Check details

The Securities and Exchange Board of India (SEBI) has rejected settlement requests filed by Zee Entertainment Enterprises (Zeal) and Punit Goenka on Thursday, January 2, and requested further investigation into the case. While SEBI has withdrawn the show due to notices issued to Zee, Subhash Chandra and Punit Goenka for alleged violations of SEBI regulations, it has forced consolidation of the contents of the show and cause notices in the broader ongoing investigation.

“The allegations contained in the SCN dated July 06, 2022 issued by the AO must be included with the findings of the further investigation conducted by SEBI in this case. Accordingly, the content of the SCN dated July 06, 2022 issued by the AO including the examination report and all approved documents will be dealt with.” As an integral part of the further investigation report conducted by SEBI in the ZEEL matter,” the Sebi order said.

The matter relates to litigation commenced against Zee Entertainment Enterprises under Section 23E of the Securities Contracts (Regulation) Act, 1956.

Sebi has referred the matter for further investigation. In a court order issued on Thursday, the market regulator noted that Zee and Goenka had filed for settlement over alleged violations of the Listing Obligations and Disclosure Requirements (LODR) Regulations. Sebi issued a show-cause notification in the matter in July 2022.

ZEE shares ended at Rs 123.95 on the BSE on Thursday, up 0.73%.

Sebi stated that the examination report and all other documents relied upon will be included as a crucial part of the ongoing investigation. The Initial Offer Notice will also be referenced in future notices to be issued.

Consequently, Sebi’s August 2023 decision barred Chandra and Puneet Goenka from holding key positions in four companies of the group. Sebi had previously charged the promoters of Shirpur Gold Refinery, an entity of Essel Group, of engaging in fraudulent practices and diversion of funds in June 2023. As a result of Sebi’s action against the founders, the $10 billion merger between the Zee unit and Sony India was stalled.

Regulatory authorities are currently investigating the alleged misappropriation of funds by Chandra and his son Puneet Goenka. The preliminary inquiry includes a Letter of Comfort (LoC) worth Rs 2,000 crore. However, Sebi informed the Securities Appellate Tribunal (SAT) that additional letters of credit, including a letter worth Rs 4,210 crore issued by Chandra in his capacity as chairman of Essel Group, are also being examined.

SAT granted Goenka relief from the ban.