ZEE funds diversion case: SEBI turns down plea for settlement

The panel of Whole Time Members of the Securities and Exchange Board of India (SEBI) has rejected the settlement applications of Zee Entertainment Enterprises Ltd (ZEEL) and Punit Goenka in the adjudication proceedings against ZEEL, Subhash Chandra and Punit Goenka for the alleged violations of various provisions of Regulations under the SEBI Act.

The members also referred the matter to SEBI for further investigation.

In its adjudication order dated January 2, 2025, SEBI said, “In this regard, it has been observed that subsequent to completion of investigation in the instant matter, it has been decided by the Competent Authority to proceed against the Noticees under Section 11B of SEBI Act 1992.”

SEBI further approved that the allegations in the Show Cause Notice (SCN) dated July 06, 2022 issued by SEBI-appointed Adjudicating Officer Parag Basu are to be subsumed with the findings of the further investigation carried out by SEBI in the instant matter. “Accordingly, the content of the SCN dated July 06, 2022 issued by the AO, including the examination report and all the relied upon documents, will be treated as integral part of the further investigation report by SEBI in the matter of ZEEL,” the order stated.

SEBI had initiated adjudication proceedings in the matter of Zee Entertainment Enterprises Ltd under Section 23E of the Securities Contracts (Regulation) Act, 1956 against ZEEL for the alleged violations of provisions of Regulations 4(1)(e),(j) r/w Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) r/w clause 2 of Listing Agreement, and under Section 15HB of the SEBI Act, 1992 against Subhash Chandra, Director, Ex-Chairman of ZEEL, and Punit Goenka, Executive Director, CEO and MD of ZEEL for the alleged violations of provisions of Regulation 4(2)(f) sub regulations (i) (1) & (2), (ii)(6), (iii)(3), (iii)(6) of LODR Regulations.

The case concerns alleged diversion of funds by Subhash Chandra and Punit Goenka.

SEBI ordered that the contents of the Show Cause Notice dated July 06, 2022 issued by the Adjudicating Officer to ZEEL, Subhash Chandra and Punit Goenka will also be incorporated in the SCN to be issued in the instant matter.

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