Zee Entertainment: SEBI Investigation Reveals Rs800 Crore-Rs1,000 Crore May Have Been Siphoned, Says Report
Moneylife Digital Team 23 January 2024
Securities and Exchange Board of India (SEBI) may have zeroed in on the role of Zee Entertainment Enterprises Ltd (ZEEL)'s managing director and chief executive officer (MD&CEO) Punit Goenka in misuse of funds as key managerial personnel (KMP) in Essel group companies, and the investigation by the market regulator reveal Rs800 crore to Rs1,000 crore may have been siphoned against its previous finding of Rs200 crore, says a report.
According to a report by CNBC-TV18, after the investigation, SEBI is likely to issue show-cause notices (SCNs) to Mr Goenka and Subhash Chandra. "SEBI may have zeroed in on Mr Goenka's role in the misuse of funds as KMP in Essel group companies and could also impose a penalty on him. SEBI is likely to complete its probe in this matter over next two-three months," the report says. 

Sources informed CNBC-TV18 that there could be another negative surprise coming from SEBI. "SEBI is in the final stages of its investigation against Punit Goenka and Subhash Chandra Goenka and their role at Zee," the report says, quoting sources.

SEBI has been investigating charges around fund siphoning and window dressing of books of accounts which allegedly benefited the promoter family of Zee Entertainment.
In its order in August last year, SEBI alleged that Mr Goenka and his father, Subhash Chandra, former chairman of ZEEL, abused their positions as directors and KMP of a listed company by siphoning off funds for their own pecuniary benefit. Both were barred from holding any position in four companies of the ZEE group or any company formed following a merger, amalgamation or demerger of these companies. This includes ZEEL, Zee Media Corp Ltd, Zee Studios Ltd (a subsidiary of ZEEL), and Zee Akash News Pvt Ltd (a subsidiary of Zee Media). 
During the hearing, Madhabi Puri Buch, chairperson of SEBI, noted that based on a letter of comfort (LoC), on 24 July 2019, Yes Bank adjusted the fixed deposit (FD) of Rs200 crore to meet the obligations of seven group companies of ZEEL, including Pan India Infraprojects Pvt Ltd, Essel Green Mobility, Essel Corporate Resources Pvt Ltd, Essel Utilities Distribution Co Ltd, Essel Business Excellence Services Pvt Ltd, Pan India Network Infravest Ltd and Living Entertainment Enterprises Pvt Ltd. 
ZEEL submitted that these seven companies repaid the Rs200 crore liquidated by Yes Bank and there was no loss to the company. 
However, after examining the bank statements of ZEEL, its associate entities and other entities, the market regulator noted that a significant portion of the Rs200 crore inflow in ZEEL originated from ZEEL itself or listed companies of Essel group or their subsidiaries, which, after passing through several layers, reached the accounts of those seven companies from where it ultimately went to ZEEL. 
"Thus, the funds had followed a circular route where funds originated from ZEEL or listed companies of Essel group and their subsidiaries, passed through various entities including those owned or controlled by the promoter family and ultimately reached ZEEL," it added. (Read: ZEE Entertainment: SEBI Bars Subhash Chandra, Punit Goenka from Holding Any Position in 4 Companies; To Complete Probe in 8 Months)
Later in October, securities appellate tribunal (SAT) set aside SEBI order banning Mr Goenka from holding key managerial posts. "We also make it clear that any observation made in this order is prima facie observation and will not influence the investigation nor will it be utilised by either of the parties," the tribunal says.
Earlier in August 2023, while refusing to give any interim relief to Mr Goenka against the SEBI order, SAT says the market regulator cannot keep going on its investigation in the ZEEL matter. 
During the hearing, justice Tarun Agarwala observed that the tribunal is not satisfied with the eight months mentioned for investigation by SEBI, after which the market regulator will serve a notice. "So it cannot go on indefinitely. We don't agree with the impugned order."
6 months ago
IT & ED with SEBI should do through INVESTIGATION in Essel & ZEE group companies & total Mismanagement & probable laundering of Shareholders & Investors funds by Punit & Subhash Chandra in last decade!
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