Sebi rejects settlement applications filed by ZEE, Punit Goenka; check details

The Securities and Exchange Board of India (SEBI) has rejected settlement bids filed by Zee Entertainment Enterprises (ZIL:) and Punit Goenka on Thursday, January 2, and asked for further investigation into the matter. While SEBI withdrew show cause notices issued to Ze, Subhash Chandra and Punit Goenka for alleged violations of SEBI regulations, it mandated consolidation of the show cause notices into the ongoing broader investigation.

“The allegations made by the AO dated 06 July 2022 shall be incorporated with the results of the further investigation conducted by SEBI in the present case. Accordingly, the contents of the SCN dated 06 July 2022 inclusive the examination report and all supporting documents will be considered as an integral part of SEBI’s further investigation report in this matter.ZEEL,” the Sebi order said.

This relates to the adjudication proceedings initiated against Zee Entertainment Enterprises under Section 23E of the Securities Contracts (Regulation) Act, 1956.

Sebi referred the matter for further investigation. In the judgment order issued on Thursday, the market regulator said that Zee and Goenka had filed a settlement application for alleged violations of listing obligations and disclosure requirements (LODR) regulations, which Sebi had filed in July 2022.

Shares of ZEE ended at Rs 123.95 on the BSE on Thursday, up 0.73%.

Sebi stated that the examination report and all other documents will be included as a crucial part of the ongoing investigation. The preliminary show-cause notice will also be referred to in future notices to be issued.

Consequently, Sebi’s decision in August 2023 resulted in Chandra and Punit Goenka being barred from holding key positions in four group companies. Sebi had earlier accused the promoters of Shirpur Gold Refinery, an Essel Group entity, of indulging in fraud and diversion of funds in 2023.

Regulators are currently investigating the alleged misappropriation of funds by Chandra and his son Punit Goenka.The initial inquiry includes a letter of convenience (LoC) amounting to Rs 2,000 crore.However, Sebi informed the Securities Appellate Tribunal (SAT) that additional LoCs are also being scrutinized, including one worth Rs 4,210 crore issued by Chandra to Essel Group chairman status.

SAT exempted Goenka from ban.