Zee Forms Independent Advisory Committee To 'Guide' It Amid Turbulence

Zee Entertainment Enterprises Ltd. said its board has constituted an independent advisory committee to review the alleged widespread circulation of misinformation, market rumours and speculation about the company.

The committee will be presided over by former Allahabad High Court Judge Satish Chandra and will comprise two independent directors—Uttam Prakash Agarwal and PVR Murthy, according to a company statement issued on Friday.

Zee said the misinformation and market rumours have led to negative public opinion about the company and "consequent erosion of investor wealth."

The committee will independently provide guidance on the measures and future course of action that the board is required to take in order to protect the interests of all the stakeholders in the company, the statement said. The board will seek the expert guidance of the committee in such matters.

Zee Hit With Probes, Sony Deal Fallout

The move comes amid a series of troubling news for the Subhash Chandra-founded company, leading to a nearly 40% decline in the stock since the start of 2024.

Securities and Exchange Board of India might issue a show cause notice to Zee next month in a fund diversion case, NDTV Profit reported this week.

The capital market regulator is currently summoning directors to further investigate claims of fund diversion and is committed to closing the investigation process by April, according to people with knowledge of the matter, who spoke on condition of anonymity.

As part of its investigation, the regulator has detected a likely fund diversion of Rs 2,000 crore.

Earlier this month, SEBI in an interim order asked several guest experts on Zee Business to repay Rs 7.41 crore in alleged unlawful gains made by taking positions contrary to their on-air advice.

The investigation focused on the correlation between trading activities and stock recommendations of the experts from Feb. 1, 2022 to Dec. 31, 2022.

Later, Zee clarified that these noticee(s) are external and independent guests with whom the company had no relation beyond their TV appearances on Zee Business channel.

Media reports have also indicated the media company is trying to review the $10 billion merger talks with Sony Group.

On Jan. 22, the merger between Zee Entertainment and Sony Group's India unit, Culver Max Entertainment, was called off, causing a significant loss in the former's stock price.

Shares of Zee Entertainment Enterprises closed 3.15% higher at Rs 173.45 apiece on Friday, ahead of the announcement, as compared with a 0.02% decline in the benchmark BSE Sensex.