The Securities and Exchange Board of India (SEBI) has barred Zee Entertainment Enterprises Ltd. Managing Director and CEO Punit Goenka and founder-chairman emeritus Subhash Chandra from accessing the securities market for one year. The market regulator has also imposed a combined monetary penalty of Rs 1.48 crore over the unauthorised mortgage of the company's fixed assets.
Order Stems From Hyderabad Property Mortgage
In its final order issued on Friday, SEBI found that a fixed deposit linked to Zee's Hyderabad property was created without the approval of the company's board or shareholders. According to the regulator, the transaction was undertaken to secure loans for entities belonging to the Essel Group.
SEBI said the arrangement violated governance norms and failed to safeguard the interests of Zee's shareholders. The regulator held that the company's assets were used to benefit promoter-linked entities without following the required approval process.
Penalties And Market Ban
Under the order, Punit Goenka and Subhash Chandra have each been restrained from buying, selling or otherwise dealing in securities for one year.
SEBI has also levied a total penalty of Rs 1.48 crore on the two executives. The regulator said the action was taken after concluding that the transactions breached provisions of securities laws and corporate governance requirements.
The order marks the conclusion of SEBI's investigation into the matter, which examined whether company resources were diverted to support promoter group entities through unauthorised financial arrangements.
The regulatory action comes as Zee continues to focus on its business operations following a period of heightened scrutiny over governance practices. The latest order adds to the list of enforcement measures arising from the regulator's probe into transactions involving the media company's promoter group.
Also Read: Zee Entertainment To Raise Up To Rs 3,144 Crore From Promoter Group Entity Via Warrants
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