MCA Investigates Alleged Irregularities in Zee Entertainment Enterprises

4 Aug 2023 , 03:10 AM

India’s Ministry of Corporate Affairs (MCA) is looking into irregularities at Zee Entertainment Enterprises, based on the allegations made by the Securities and Exchange Board of India (SEBI), as reported by ET Now on Friday.

The MCA has taken notice of SEBI’s interim order, which accused the company of bogus book entries and fund siphoning, and is currently investigating potential lapses in corporate governance, according to sources cited in the report.

However, the MCA has not issued an inspection order at this stage, as mentioned in the report.

Zee Entertainment Enterprises claims to be unaware of any MCA probe and has not received any notice from the ministry, according to a source familiar with the matter, as reported by Reuters.

Following the news of the investigation, shares of the media and entertainment company initially dropped by as much as 3.9% before recovering slightly to trade down 0.3%.

Both MCA and Zee Entertainment Enterprises have not provided an immediate response to Reuters’ request for comment, as per information.

In a previous development on June 12, SEBI had imposed a one-year ban on Zee’s Chairman Subhash Chandra and CEO Punit Goenka from holding board positions in listed companies. The ban was due to their alleged active involvement in diverting funds to other group entities and related firms linked to founding shareholders.

To cope with the regulatory ban, Zee Entertainment Enterprises formed an internal committee last month to oversee its operations after unsuccessful attempts by Chandra and Goenka to overturn the SEBI ban on holding board positions.

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