Subhash Chandra, the chairman emeritus of Zee Entertainment Enterprises Ltd, is not helping in an investigation about money possibly being redirected from the media company, according to the Securities and Exchange Board of India (Sebi), as communicated to the Securities Appellate Tribunal (SAT).
Chandra’s legal team disputes these claims. Sebi’s representative, senior counsel Darius Khambata, countered Chandra’s assertion of cooperation, stating that Sebi’s attempts to communicate with him, such as issuing summons and asking for documents, have resulted in promises of delayed responses.
Subhash Chandra’s Cooperation in Zee Fund Diversion Probe Questioned
Sebi (Securities and Exchange Board of India) is stating that Subhash Chandra, the chairman emeritus of Zee Entertainment Enterprises Ltd, has not been cooperating with the Zee fund diversion probe. According to Sebi’s representative, Darius Khambata, they have been sending letters and summonses to Chandra, requesting information and documents, but Chandra has been asking for 6-8 weeks to respond.
Khambata mentioned that Chandra only recently filed an application, long after an order was issued in August 2023. In response, Chandra’s counsel, Shyam Mehta, referred to a detailed ruling by the Securities Appellate Tribunal (SAT) in October, seeking a stay on Sebi’s August order.
Subhash Chandra’s Response to Sebi’s Order
Subhash Chandra expressed concern about the impact of Sebi’s August order on his reputation and the companies with which he is associated. He stated that he felt treated unfairly, almost like a criminal, in his plea against Sebi’s order.
On August 14, 2023, Sebi issued an order against Subhash Chandra and Punit Goenka, accusing them of diverting funds and prohibiting them from holding key managerial positions in listed companies. Sebi set a deadline for completing its investigation by April.
On October 31, Punit Goenka was reinstated as the managing director and chief executive of Zee Entertainment by the Securities Appellate Tribunal (SAT), overturning a ban imposed by Sebi for allegedly misappropriating company funds.
Sebi Uncovers Large Financial Discrepancy in Zee Entertainment’s Accounts
Recent media reports reveal that Sebi has discovered a financial inconsistency of over $240 million, approximately ₹2,000 crore, in the accounts of Zee Entertainment Enterprises. This amount is nearly ten times higher than what Sebi investigators initially estimated.
The Securities Appellate Tribunal (SAT) has given Sebi a deadline of 10 days to submit a response regarding this matter and has scheduled further hearings for March 8.
During today’s hearing, Khambata, representing Sebi, pointed out that Subhash Chandra’s delayed application lacked urgency. Chandra mentioned that he resigned as the chairman of Zee in November 2019 and wasn’t associated with any Zee group or listed company. Therefore, Khambata argued that Chandra’s petition lacked merit and couldn’t be considered maintainable.
Mehta Counters Allegations of Fraud and Fund Misappropriation
Shyam Mehta, representing Subhash Chandra, emphasized the damaging nature of fraud and fund misappropriation allegations. He stated that such accusations were prejudicial and being used across various proceedings to portray Chandra as a criminal involved in financial wrongdoing.
Sebi’s investigation into fund diversions at Zee Entertainment played a significant role in the collapse of Sony India’s proposed $10-billion merger with the Indian company. One of the key concerns was objections to Punit Goenka leading the new merged entity. After the merger deal fell through, despite two years of negotiations, Chandra wrote to Finance Minister Nirmala Sitharaman, alleging that Sebi’s actions were an attempt to “scuttle” the merger.
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