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Troubles mount for Zee, Punit Goenka as report says SEBI probe reveals up to Rs 1,000 cr siphoned

Troubles mount for Zee, Punit Goenka as report says SEBI probe reveals up to Rs 1,000 cr siphoned

A report said on Tuesday that the alleged amount siphoned being investigated by market regulator has risen substantially

Business Today Desk
Business Today Desk
  • Updated Jan 23, 2024 3:20 PM IST
Troubles mount for Zee, Punit Goenka as report says SEBI probe reveals up to Rs 1,000 cr siphonedTroubles mount for Zee, Punit Goenka as SEBI probe reveals up to Rs 1,000 cr siphoned: Report

In what could be a bigger death knell for shareholders of Zee Entertainment Enterprises Ltd, a report said on Tuesday that Sebi's probe reveals Rs 800-Rs 1,000 crore may have been siphoned as against the earlier reported figure of Rs 200 crore. 

CNBC TV18 reported that the alleged amount siphoned being investigated by market regulator Securities and Exchange Board of India (Sebi) has risen substantially. 

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The report couldn't have come at a worse time for Zee shareholders as the stock already got battered 30% on Tuesday in the wake of Japan's Sony terminating the $10-billion merger deal with Zee on Monday. At 1400 hours on Tuesday, Zee's scrip was trading 29% lower at Rs 164.25.

SEBI is likely to have zeroed in on ZEE MD & CEO Punit Goenka’s role in misuse of funds as Key Managerial Personnel (KMP) in Essel entities, the reported said, adding that the market regulator could look at upholding its order restraining Goenka From holding position as a director. 

SEBI could also impose monetary penalty on Punit Goenka, reported CNBC TV18. Business Today couldn't independently verify the veracity of this news report. 

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SEBI is likely to issue show cause notice To Punit Goenka and Subhash Chandra post its investigation, which is likely to take 2-3 months, said the report.

On Monday, Culver Max Entertainment, formerly known as Sony Pictures Networks India (SPNI), terminated merger agreements with Zee Entertainment, which could have otherwise created a $10-billion media enterprise in the country.

“SPNI, a wholly-owned subsidiary of Sony Group Corporation, today issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd (ZEEL) relating to the merger of ZEEL with and into SPNI, which was…announced on December 22, 2021,” a statement by Sony Group Corporation said on Monday.

Sony sent the termination notice to Subhash Chandra family-promoted media and entertainment firm following a stalemate over who will lead the merged entity, besides not satisfying other conditions for the merger.

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Sony is also seeking $90 million as break-up fees for violating the terms of the merger pact and “invoking arbitration”, which ZEEL said it will contest legally.

On the other hand ZEEL said it has spent Rs 366.59 crore on compliances till September 2023 for its merger with Sony.

The company spent Rs 176.20 crore in the financial year that ended in March 2023. Besides, it spent Rs 190.39 crore in the first six months of the current fiscal, according to a regulatory filing by ZEEL.

On December 17 last year, ZEEL had sought an extension of the deadline from Culver Max and Bangla Entertainment Pvt Ltd (BEPL) under the 2021 agreement.

SPNI had initially said that it had not yet agreed to the deadline extension request by ZEEL. But later, it agreed to discuss the matter.

The proposed merger had already received regulatory approvals from fair trade regulator CCI, NSE and BSE, shareholders and creditors of the company.

In August last year, the Mumbai bench of the National Company Law Tribunal (NCLT) also gave a go-ahead to the merger. 
 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jan 23, 2024 2:11 PM IST
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