Sebi Bans Subhash Chandra, Punit Goenka From Holding Key Position In ZEE Board, Shares Tumble 7 Per Cent

Zee Entertainment Chairman R Gopalan said the board was reviewing the order

The Sebi in an interim order on Monday barred Subhash Chandra and Punit Goenka from holding the position of a director or key managerial personnel in any listed company for siphoning off funds of the media firm.

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Zee Entertainment Enterprises' shares fell over 6.50 per cent in early morning trade on Tuesday after the Securities and Exchange Board of India (Sebi) banned Essel Group Chairman Subhash Chandra and ZEE MD and CEO Punit Goenka from holding any directorial or key managerial position in any listed company. ZEE stocks tumbled 6.28 per cent to Rs 182.60 apiece on the BSE. On the NSE, it tanked 6.59 per cent to Rs 182 each share.

The Sebi in an interim order on Monday barred Subhash Chandra and Punit Goenka from holding the position of a director or key managerial personnel (KMP) in any listed company for siphoning off funds of the media firm. The case pertains to Chandra, who was also the chairman of Zee Entertainment Enterprises Ltd (ZEEL) during the alleged violation, and Goenka having abused their position as directors or KMPs of a listed company for siphoning off funds for their own benefit.

A day after the Sebi barred Zee the promoters, Zee Entertainment Chairman R Gopalan said the board was reviewing the order. "The Board is currently in the process of reviewing the detailed order, and appropriate legal advice is being sought in order to take the next steps as required.With a singular focus on enhancing the shareholder value year after year, the Board of the company has continued to guide the management towards its strategic goals and priorities for the future," Gopalan said in a statement.

In its interim order, Sebi noted that Chandra and Goenka alienated the assets of ZEEL and other listed companies of Essel Group for the benefit of associate entities, which are owned and controlled by them.

The Sebi noted that the share price of ZEEL has come down from a high of close to Rs 600 per share to the current price of less than Rs 200 per share during the period FY18-19 to FY22-23. This erosion of wealth despite the company being so profitable and generating profit after tax consistently would lead to a conclusion that "all was not well with the company".