ZEE constitutes independent committee to probe all charges raised by Sebi

ZEE Entertainment Enterprises Ltd (ZEEL) on Tuesday said it has constituted an independent committee to probe all the allegations leveled by market regulator Sebi. Zee on February 23 formed an 'Independent Advisory Committee' headed by a retired judge to help restore shareholders' confidence in the company.

Zee saw a massive wealth erosion as its shares plunged last month following Sony's decision to call off its merger due to differences with the media firm's top leadership, which is facing a fund diversion probe by Sebi.

Today, the Board of Directors of Zee renamed it as an 'Independent Investigation Committee', which shall "fact check/review/examine all allegations raised by the regulatory agencies against the company, its promoters, and KMPs through a deep dive exercise".

"This would be done in order to safeguard the interest of the shareholders and other stakeholders of the company," Zee said in a statement. "After completing the exercise, the Committee will submit its report to he Board with its recommendations and suggest actions required to be undertaken by the Board."

Zee said the committee can also appoint/hire any other independent outside agency to assist it in fulfilling its charter. The Committee will be chaired by Justice Satish Chandra. ZEE's Independent Directors Uttam Prakash Agarwal and PVR Murthy will be part of the committee.

"The committee will review all company records and information to prepare a detailed report to the Board, advising on the future course of action in the best interest of all the shareholders and other stakeholders of the company," Zee said.

The trouble for Zee began in June 2023 when Sebi barred Zee Entertainment's Subhash Chandra and Punit Goenka from becoming directors or key management personnel (KMP) in any listed company for allegedly abusing their positions in the company and siphoning off funds for their benefit.

Earlier this month, Bloomberg reported that Sebi had found a discrepancy of more than $240 million in the accounts of Zee Entertainment Enterprises, in another blow to the embattled media firm less than a month after its merger with Sony Group Corp’s local unit collapsed.

As part of its investigation into the Zee founders, the regulator found that about $241 million may have been diverted from the company, a Bloomberg report said, adding that the amount is roughly ten times more than initially estimated by the regulator.

The report said that the amount found missing was not final and may change after Sebi reviews the responses from the company executives. The regulator has been calling in senior officials at Zee including founders, Subhash Chandra, his son Punit Goenka, and some board members to explain their stance, they added.

However, a Zee spokesperson called the report "incorrect and false". "The reports and rumours pertaining to accounting issues in the company are incorrect and false. Pursuant to the SAT order, which granted relief to the current Key Managerial Personnel (KMP), the Company has been in the process of providing all the comments, information or explanation requested by SEBI, and has extended complete co-operation on all aspects,” the spokesperson said.