The Ministry of Corporate Affairs (MCA) is looking into SEBI's order against Zee Entertainment Enterprises for alleged irregularities, reported ET Now on Friday. In June, the market regulator banned Zee Chairman Subhash Chandra and CEO Punit Goenka for alleged "abused their positions" for personal financial gains. It said that the media house had faked the recovery of loans to cover private financing deals by its founder Subhash Chandra.
On Friday, the report said that Corporate Affairs Ministry has taken cognizance of the SEBI's interim order of June 12 and is probing lapses in corporate governance. However, the report citing sources also noted that MCA has not issued an inspection order on the probe.
According to a Reuters report, Zee Entertainment Enterprises Ltd has not been made aware of any investigation by the Ministry of Corporate Affairs (MCA) and has not received any notice from the ministry.
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The news agency report also noted that ZEEL's shares fell by as much as 3.9 per cent after the MCA probe report came out. However, later recovered slightly, ending the day down by 0.3 per cent.
Securities and Exchange Board of India (SEBI) has imposed a one-year ban on Zee's Chairman Subhash Chandra and CEO Punit Goenka from holding any board positions in listed companies. As per the report, following the ban the company had formed an internal committee to manage its operations after unsuccessful attempts by Chandra and Goenka to overturn the SEBI's decision.
Last month, the Securities Appellate Tribunal (SAT) refused to stay SEBI's order. The development has also raised questions about the future of the ZEE-Sony merger which was announced in 2021.
"The ZEE-Sony merger holds immense significance, regardless of my position as CEO. The resulting entity will be under Sony's control, and they have chosen to retain me as a promoter, MD and CEO," Punit. Goenka told the Economic Times in July. Sony has also said that it takes the SEBI order "seriously" and will monitor developments that may affect the deal.