The board of directors of Zee Entertainment Enterprises Ltd. (ZEEL) has reviewed the interim ex-parte order issued by the Securities and Exchange Board of India (SEBI) and is currently in the process of reviewing the detailed order and seeking legal advice.
“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,” read an excerpt from the official statement released by R. Gopalan, Chairman, Zee Entertainment Enterprises Ltd.
This comes soon after SEBI banned Essel Group Chairman Subhash Chandra and Zee Entertainment Enterprises (ZEEL) CEO Punit Goenka for a period of five years from holding any directorial or key managerial position in listed companies or their subsidiaries. The market regulator passed this order after its investigations found that Chandra and Goenka abused their position as directors/KMPs of a listed company for siphoning off funds for their own benefit.
ZEEL’s chairman’s office in its statement has assured that the company will be taking all the appropriate steps in order to ensure that the interest of the company and all its valuable shareholders is kept at the forefront.
“The Board recognizes the significant contribution made by Dr. Subhash Chandra as the founder of the Company and the growth and value generation centric leadership showcased by Mr. Punit Goenka. The Board is confident that the Company will continue to achieve the set goals for the future and most above, create value for all stakeholders,” the statement said.
The ban however is a major setback for Chandra and Goenka, who have been in control of the Essel Group for over two decades. The group has interests in media, entertainment, infrastructure, and education.
The ban is also a blow to ZEEL, which is one of the largest media companies in India. The company has been struggling in recent months due to declining viewership and advertising revenues.
In April this year, the regulatory body had issued an interim order-cum-show-cause notices on to Shirpur Gold Refinery Ltd (SGRL), its promoter Jayneer Infrapower and Multiventures, and six individuals, including its erstwhile chairman Amit Goenka, for allegedly siphoning off funds from the company and violating other rules.
The notices were issued after Sebi found that SGRL had diverted funds to its promoter Jayneer Infrapower and Multiventures, which is a part of the Subhash Chandra Goenka led-Essel Group. The company had also allegedly violated other rules, such as not maintaining proper books of accounts and records.
Amit Goenka was non-executive chairman and director of SGRL till 2021-22. The other individuals who have been issued notices are Mukund Galgali, Vipin Choudhary, Dineshkumar Kanodia, Shravan Kumar Shah, and Ashok Sanghvi.
The family members of Subhash Chandra, including his son Amit Goenka, are the shareholders in Jayneer Infrapower and Multiventures.