“There have been several erroneous press reports recently speculating about the future of ZEE’s planned merger with Sony Pictures Networks India following Sebi’s interim order against Subhash Chandra and Punit Goenka. We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal,” SPE said in a statement.
On June 12, Sebi passed an interim order against ZEE promoters following an investigation that found the two had reportedly abused their board positions in ZEE by “siphoning off funds for their own benefit,” the regulator said. The regulator has directed ZEE to place the order before its board within seven days.
The Goenkas were given 21 days to respond to the regulator’s order. Meanwhile, the Goenkas moved the securities appellate tribunal against the Sebi order on June 13. SAT admitted Chandra and Goenka’s appeal on June 15 and gave Sebi 48 hours to file its reply.
In its reply to SAT, Sebi reiterated that the Goenkas had diverted public funds to private entities. It added that the two are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies were diverted to private entities owned and controlled by these individuals. ZEE had also written a letter to Sebi stating that “continuous and repetitive” inquiries into the same cause of action damage the company and shareholders. It had also stated that the transaction flagged by Sebi pertains to 2019, and that a detailed explanation has already been provided to stock exchanges and Sebi.
It added that the inquiries might also have an effect on the company’s merger process with Sony Pictures Networks India (SPNI).
The two companies had decided to merge operations in December 2021, with Sony owning 50.86% of the combined company and ZEE shareholders, including the promoters, holding the remaining 49.14%. ZEE’s founder would own a 3.99% stake in the merged entity.
