SEBI uncovers Rs. 2,000 crore discrepancy in Zee's accounts
India's market watchdog, the Securities and Exchange Board of India (SEBI), has reportedly uncovered a financial discrepancy of around Rs. 2,000 crore in the accounts of Zee Entertainment Enterprises. The revelation comes just weeks after the collapse of Zee's merger with Sony's India unit. The exact amount in question may change as SEBI reviews responses from company executives.
SEBI summons Zee founders, board members for explanations
SEBI has called upon top officials, including founder Subhash Chandra, his son Punit Goenka, and some board members, to explain the financial irregularities. A Zee representative declined to comment on the fund diversion but confirmed that the company is actively cooperating with SEBI's ongoing investigation.
SEBI's fresh allegations may impact merger revival talks
Zee and Sony India are in talks to revive their $10 billion merger, which was canceled last month. SEBI's fresh allegations of fund diversion may dampen the merger revival talks. The merger would bolster Sony by granting access to Zee's vast content library in regional Indian languages. Falling short of analyst expectations, Zee reported a 95% drop in full-year profit up to March 31 and a profit of Rs. 58.5 crore for the quarter ending December 31.
History of regulatory probes and merger collapse
The regulatory probe into alleged financial misconduct involving Zee's top executives has fueled tensions between Sony and Zee since mid-2023. Sony has been hesitant to let Goenka lead the merged entity. Goenka insists on his promised CEO role. The stand-off ultimately led to the deal's termination in January. In August, SEBI barred Zee founders Chandra and Goenka from holding executive or director positions in any listed company, citing "abuse of their position" and siphoning of funds for personal gain.