ZEE shares in focus as Sebi to conclude probe on Subhash Chandra, Punit Goenka in 8 months

Shares of ZEE Entertainment Enterprises (ZEE) will be in focus on Wednesday morning after the markets regulator Sebi said it would conclude the investigations pertaining to Subhash Chandra and Punit Goenka within eight months.

Sebi clarified that till the order, the Chandra and Goenka should not hold positions of a director or a KMP in ZEE, other public listed companies and their wholly owned subsidiaries, which are under the control of entities and have been identified as a part of the scheme. Besides, it said the two cannot hold positions in any company that is formed pursuant to the merger or amalgamation of any of the companies with any other company.

In a confirmatory order, Sebi Chairperson Madhabi Puri Buch said while the entities may argue that even the limited restrained will be excessive and disproportionate in the matter, it is emphasised that the immense effect of permitting the entities to be in position of influence is that the ongoing investigation cannot be fair and complete. As has been highlighted earlier, Sebi said the interest of the entities are of factually in direct conflict with the interest of public shareholders of the company.

As prima facie found, the entities have actively tried to conceal the very act which have led to the loss of at least Rs 143.90 crore to the public listed companies including ZEE, Sebi said.

Sebi said entity 2 (Punit Goenka) has submitted that he is integral to the functioning of the merged company (Zee merger with Culver Max Entertainment) due to his experience in the industry and local expertise. It has also been stated that the scheme of merger also contemplates approval of the board for appointment/removal of the KMP of the company.

"The conduct of Entity 2 as the MD and CEO of ZEE has been found to be prima facie in violation of provisions of PFUTP Regulations and LODR regulations. His actions were in direct conflict with the interest of 96 per cent public shareholders of ZEE, necessitating imposition of temporary restraint on him," Sebi said.

Sebi said both Goenka and Chandra should not hold a position of a director or a KMP in ZEE Entertainment Enterprises Ltd, ZEE Media Corporation, ZEE Studios and ZEE Akaksh News.

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