ZEE Entertainment Enterprises, in its response to the Securities and Exchange Board of India (SEBI) order on Subhash Chandra and Punit Goenka, has said that it is reviewing the order and seeking legal advice on the next steps. SEBI, on Monday, barred Chandra and Goenka from becoming director or holding any key managerial position in the company for allegedly abusing their positions and siphoning of funds.
“The Board of Directors of ZEE Entertainment Enterprises Ltd. (ZEEL) has noted the interim ex-parte order issued by the Securities and Exchange Board of India (SEBI), with respect to Dr Subhash Chandra and Mr Punit Goenka. The Board is currently in the process of reviewing the detailed order, and appropriate legal advice is being sought in order to take the next steps as required,” said ZEE Entertainment Enterprises Chairman R Gopalan.
He said that the board has continued to guide the management towards strategic goals and priorities for the future in order to enhance shareholder value. “All the appropriate steps will be actioned as necessary, in order to ensure that the interest of the Company and all its valuable shareholders is kept at the forefront,” said Gopalan.
Gopalan also recognised the contribution made by Chandra as the founder of the company and Goenka’s “growth and value generation centric leadership”.
SEBI’s interim order on Monday comes after allegations related to appropriation of certain fixed deposits of ZEEL by Yes Bank for squaring off loans of related entities of Essel Group, that kickstarted an investigation.
The SEBI probe stated that Chandra had provided a ‘Letter of Comfort’ (LoC) – that was only known to a few persons, and not even to the board – towards credit facilities availed by certain group companies from Yes Bank.
Meanwhile, ZEE Entertainment shares declined 6.28 per cent to hit a low of Rs 182.60 on BSE on Tuesday. The stock then recovered and was later traded at Rs 188.25, down 3.39 per cent.
Also read: ZEE Entertainment shares plunge 6% as Sebi bars Punit Goenka, Subhash Chandra from holding key posts
Also read: SEBI bars ZEE's Subhash Chandra, Punit Goenka from holding directorial position