India's market regulator has issued a show-cause notice to Zee Entertainment Enterprises Ltd. and its leadership, reviving allegations of fund diversion and governance lapses that derailed its planned merger with Sony Pictures Networks India.
The Mumbai-based broadcaster said it will respond formally to the Securities and Exchange Board of India. The Economic Times earlier reported the notice targets both the company and its chairman and chief executive officer, following a multi-year probe into Zee's internal financial dealings.
“The company has received a show-cause notice from SEBI pertaining to certain allegations made in 2019 by vested interests,” a Zee spokesperson said in an emailed statement. “SEBI initiated an investigation which was unduly prolonged.”
The regulatory scrutiny was a key obstacle to Zee's merger with Sony, which was abandoned in January 2024 after two years of legal disputes. Zee said the probe disrupted strategic plans, including the merger, causing significant losses to shareholders.
The company reiterated that it refutes all allegations against itself and the members of its board, stressing its commitment to the “highest standards of governance” and readiness to pursue legal remedies.
As a standalone broadcaster, Zee now faces a shifting media landscape dominated by the joint venture between Walt Disney Co. and Reliance Industries Ltd's Viacom 18 Media Pvt., which holds a commanding share of cricket broadcasting rights.
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