 "Zee")
Shares of Zee Entertainment Enterprises (ZEE) slipped 6 per cent to Rs 182.60 on the BSE in Tuesday’s intra-day trade after the Securities and Exchange Board of India (Sebi) on Monday barred the company’s promoter and Essel group Chairman Subhash Chandra and MD and CEO Punit Goenka from holding key positions in any listed company for allegedly diverting assets of Essel Group companies.
“The Securities and Exchange Board of India has issued an interim ex-parte order against Dr. Subhash Chandra and Mr. Punit Goenka, Managing Director & CEO of the Company,” ZEE said in an exchange filing.
The order followed an investigation, which found the two had abused their board positions in Zee by "siphoning off funds for their own benefit.
The matter pertains to a Letter of Comfort (LoC) granted by Chandra in September 2018 towards credit facilities taken by certain group companies from YES Bank. The credit amounted to Rs 200 crore.
The allegations are that these guarantees were given without approval from the board and were used to siphon off funds by the promoters.
Sebi observed the funds had followed a circuitous route, by which they originated in Zee or listed companies of Essel Group, passed through various entities owned or controlled by the promoter family, and ultimately ended up with Zee. READ MORE
The development could delay Zee's proposed merger with Sony Pictures Networks India (SPNI). Furthermore, Sebi order also means Goenka may not be able to hold a senior role in the Zee-Sony merged entity, ICICI Securities said in a note.
At 09:30 am; ZEE was quoting 5 per cent lower at Rs 185.85, as compared to a 0.5 per cent rise in the S&P BSE Sensex. The stock had hit a 52-week low of Rs 175.80 on May 26, 2023. A combined 11.9 million shares changed hands on the NSE and BSE.
