Delhi Court Asks Bloomberg To Take Down Article On Zee

Signage for ZEE5, an over-the-top (OTT) platform of Zee Entertainment Enterprises Ltd., in Mumbai, India, on Tuesday, Jan. 9, 2024. Shares of Zee recovered from a steep plunge on Tuesday after the company said it was still working to close its planned merger with Sony Group Corp.’s India unit. Photographer: Dhiraj Singh/Bloomberg

A Delhi court has ordered Bloomberg to take down an article that alleged corporate governance issues at Zee Entertainment Enterprises Ltd. and reported that the market regulator has found a $241-million accounting issue at the company.

Zee alleged that the article mentioned that SEBI had issued orders against an individual promoter and a key managerial person of the company, directing them to step down from their positions in any listed companies or their subsidiaries.

The company argued that it wasn't given a chance to respond during these SEBI proceedings. It alleged that the article made "unverified claims" and linked Zee Entertainment to the SEBI orders. The court also noted that the information in the article is said to come from anonymous sources and that SEBI has not officially disclosed any large financial irregularities.

The court said in its order, "...the plaintiff has made out a prima facie case for passing ad interim ex-parte orders of injunction, balance of convenience is also in favour of plaintiff and against the defendant and irreparable loss and injury may be caused to the plaintiff, if the injunction as prayed for is not granted."

The court directed the media company to take down the article dated Feb 21 from its online platform within one week of receiving the order. "The defendants are further restrained from posting, circulating or publishing the aforesaid article in respect of the plaintiff on any online or offline platform till the next date of hearing."

Zee argued that the article was "false and factually incorrect, with a pre-meditated and malafide intention to defame the company".

It mentioned details pertaining to the corporate governance and business operations of Zee, which were "inaccurate" and led to a 15% drop in share price of the "company, eroding investor wealth", the company said in a statement.

The article by Bloomberg “incorrectly published” that Securities and Exchange Board of India has found a $241 million accounting issue at the Company, Zee said. “There is no such order from the mentioned regulator.”

Despite the company firmly refuting it, the article incorrectly alleged financial irregularities in Zee, without the basis of any order from the regulator, the company said.

The case will now be heard again on March 26.