STOCK CRASHES 15%, ZEE DENIES CHARGES
VIVEAT SUSAN PINTO
Mumbai, February 21
THE ZEE ENTERTAINMENT stock
crashed 15% on the Bombay Stock
Exchange,touching3 Rs164.50at the
end of Wednesday’s trade, following
reports that the Securities and
Exchange Board of India (Sebi) has
widened the scope of its ongoing
investigation into the company.
Bloomberg reported on
Wednesday that Sebi had found a
“hole” in the media company's
accounts, which was 10 times
more than the initially estimated
amount of X200 crore by the
investigators, who are probing
alleged fund diversion at the firm. Zee refuted the allegations and
said,“reportsand rumours pertaining to accounting is sues in the company are incorrect and false. “Pursuant to the SAT order, which
granted relief to the current key
managerial personnel, the companyhasbeen in the process of providing all comments, information
and explanations requested by Sebi.
We have extended complete cooperation on all aspects,” the
spokesperson added. Other sources said the regulator
has also asked former directors,
including two erstwhile independent directors, at the company to
appear before it in viewof the ongo ing investigation. It is also looking
at abroader set of transactions and
entitiesaspartofitswidened probe
into the company.
In June last year, Sebi had
barred Zee founders — Subhash
Chandra and his son Punit Goenka
— from holding directorships for
ayear in any listed company over
alleged fund diversion. An August
14,2023, confirmatory order by
Sebi had reduced the scope to Zee
group companies, including the
Zee-Sony proposed combine,
where Chandra and Goenka could not hold directorships.
Zee appealed against Sebi's confirmatory order in a higher appellate court (SAT) and had got a partial
reprieve in October, which allowed
Goenka, who is MD & CEO of the
company,to hold an executive positionwhile the probe was underway.
The caseled toaleadership tussle between Sony and Zee, which
prompted the Japanese major to
call off the proposed merger deal
in January.
Continued on Page 13
Wider Sebi
probe cloud
over Zee
On Tuesday evening, Zee
denied reports suggesting that
the two companies were
looking to salvage the merger
deal in a last-ditch effort, saying that it was not involved in
any negotiations with relation
to the scrapped merger deal
with Sony.
Media industry executives
had said that the possibility of
a revival of talks had emerged
as the domestic market was
consolidating, with rivals Disney and Reliance-backed Viacoml8 looking to come together.
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