As part of its investigation into the Zee founders, the Securities and Exchange Board of India, or Sebi, discovered that approximately 20 billion rupees ($241 million) may have been diverted from the company, according to people familiar with the matter who declined to be identified because the information is not yet public.
Following this development, the company’s counter fell as much as 15% to an intraday low of ₹163.75 on NSE.
According to the sources, this is around 10 times higher than what Sebi investigators first predicted.
According to the sources, the amount found missing is not final and may differ when Sebi evaluates the comments from firm leaders. The regulator has summoned senior Zee executives, including founders Subhash Chandra and his son Punit Goenka, as well as several board members, to explain their position, they said.
Sebi’s recent findings exacerbate Goenka’s concerns, as the Zee CEO attempts to reassure investors after its $10 billion deal with Sony fell through. The two-year agreement was cancelled in January following a months-long deadlock over who would manage the new corporation.
Since mid-2023, Sony and Zee have been at odds over the regulatory investigation into the father-son duo’s suspected financial irregularities. It made Sony apprehensive of allowing Goenka to lead the merged business, but Goenka refused to give up because the CEO position was given to him in the 2021 merger agreement. The dispute eventually led to Sony cancelling the transaction in January.
In a ruling issued in August, Sebi prohibited Zee founders Chandra and Goenka from holding executive or director roles in any listed business after determining that they had ‘abused their position’ and syphoned off assets ‘for their own benefit.’
Zee challenged Sebi’s ruling to a higher court and received a partial respite in October, allowing Goenka to continue working as an executive while the investigation remained ongoing.
At around 10.14 AM, Zee Entertainment was trading 10.49% lower at ₹172.45, against the previous close of ₹192.65.
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