MCA seeks info on Zee even as firm sets up panel to shore up investor confidence

The Ministry of Corporate Affairs has reportedly sought details from the Securities and Exchange Board of India on its latest findings of 'fund diversion' at Zee Entertainment Enterprises.

A preliminary probe by the MCA, according to an Economic Times report, had found appropriation of ZEEL's fixed deposits (FDs) by Yes Bank for squaring off loans of related entities in the firm. The company, the report states, has been on MCA and Sebi's spotlight since 2019 when two of the firm's independent directors quit alleging governance lapses.

The ministry could summon ZEEL CEO Punit Goenka to join the probe. BT could not independently verify the report.

On Friday, ZEEL said its board has constituted an independent advisory committee headed by Satish Chandra, retired judge of Allahabad High Court, to curb erosion of its investor wealth in the wake of speculations, leading to negative public opinion of the company.

Sebi had reportedly found financial discrepancies in the accounts of the company, although firm had asserted that the reports-related accounting issues are "incorrect and false".

"The board of ZEE Entertainment Enterprises Ltd (ZEEL), has approved to constitute an independent advisory committee that will enable it to review and take cognizance of the widespread circulation of misinformation, market rumours, and speculation that has led to the formation of negative public opinion about the company and consequent erosion of investor wealth," ZEEL said in a statement.

The committee will also have two Independent Directors of the company -- Uttam Prakash Agarwal, and P V R Murthy -- as members. The committee will independently provide guidance on the measures and future course of action that the board is required to take to protect the interests of all stakeholders of the company, ZEEL said in a statement.

"The board will seek expert guidance of the committee on the aforementioned matters from time to time," it added.