‘Monitoring regulatory developments against Zee,’ says Sony
2 min read 21 Jun 2023, 12:25 PM ISTSony Pictures Entertainment is monitoring developments that may affect its deal with Zee Entertainment, following the India markets regulator's order banning Zee's CEO from holding board positions.
PremiumSony Pictures Entertainment on Wednesday said it took the India markets regulator's order banning Zee Entertainment founder and chief executive officer from holding board positions "seriously" and will continue to monitor developments that may affect its deal with Zee, Reuters reported.
Earlier on Tuesday, Ravi Ahuja, the chairman of global television studios and corporate development at Sony Pictures Entertainment, made a two-hour presentation to the board of parent Sony Corp. in Tokyo on Tuesday, taking stock of the ongoing developments and the prospects of India’s largest media and entertainment deal, one of the people said.
“For Sony, nothing has changed. After the board meeting on Tuesday, they conveyed their full commitment to the merger," the person said, requesting anonymity. “There is a plan for the worst-case scenario—if Goenka doesn’t get a relief from the courts—but as of now, there is no discussion on that."
The Securities and Exchange Board of India alleged last week that Zee Entertainment Enterprises Ltd., the Mumbai-based media house Sony wants to combine with, had faked the recovery of loans owed by its founder Subhash Chandra’s private entities. He and his son Punit Goenka had siphoned off funds “for their own benefit," the SEBI said, barring them from executive or directorial positions in listed firms. Chandra and Goenka, Zee’s chief executive, have appealed the order on the grounds that the regulator didn’t hear their side of the story. The SEBI has doubled down by filing a 197-page reply.
On 12 June, the Sebi issued an interim order alleging that Chandra and Goenka siphoned off funds and barred the father-son duo from holding any position on the board or key managerial positions in any listed company. While Chandra stepped down as Zee chairman in 2019, his son, Punit, is Zee’s managing director and chief executive officer (CEO).
Zee has challenged Sebi’s order at the Securities Appellate Tribunal (SAT), which will next hear the matter on 26 June. In the interim, in a series of interactions over the past week, the two groups approved an alternative plan in case the worst-case scenario plays out.
(With inputs from agencies)