SEBI investigates Zee-Sony deal after regulatory action
The Securities and Exchange Board of India (SEBI) has alleged that Mumbai-based media house Zee Entertainment Enterprises’ founder Subhash Chandra used fraudulent means to cover up his private financing deals. The regulator has also accused Chandra’s son, Punit Goenka, of misusing his position and engaging in financial irregularities. As a result, SEBI has ordered both individuals to step down from their positions as executives or directors of listed companies. This development has come at a time when Zee is trying to complete its merger with Sony Pictures Networks India. Experts believe that the delay in the merger process is inevitable due to the SEBI investigation.
Key Highlights:
– SEBI alleges that Zee used several companies to lend and borrow money to cover up private financing deals by Chandra.
– Punit Goenka is accused of engaging in financial irregularities and misusing his position.
– SEBI has ordered both individuals to step down from their positions as executives or directors of listed companies.
– The delay in the merger process is inevitable due to the SEBI investigation, say experts.
The SEBI investigation has raised concerns among industry analysts, who believe that the Zee-Sony merger may face further delays. Zee is currently reviewing the SEBI order and seeking legal advice. Meanwhile, Punit Goenka has appealed SEBI’s decision, and the Securities Appellate Tribunal will hear his appeal on Thursday. Zee’s board has also said it is reviewing the order and seeking legal advice.
Zee’s merger with Sony is part of the company’s efforts to raise $10 billion to compete with streaming giants like Netflix, Amazon, and Walt Disney. However, the merger process has been complicated by disputes between Zee’s founders and its largest shareholders. Last year, the merger was approved by Zee’s shareholders and India’s antitrust regulator, but it was later delayed due to a legal dispute between the founders.
The SEBI order raises questions about the use of private financing deals by Zee’s companies to support its operations. The regulator has accused Zee of using several companies to lend and borrow money to cover up Chandra’s private financing deals. SEBI has also questioned the role of directors and shareholders in approving these transactions.
In conclusion, the SEBI investigation into Zee’s private financing deals has cast a shadow over its proposed merger with Sony. The delay in the merger process is inevitable due to the investigation, which has raised concerns about the use of private financing deals by Zee’s companies. The outcome of the SEBI investigation may have far-reaching implications for corporate governance and transparency in India’s media industry.
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