ZEE Entertainment shares in news on settling of insider trade case with Sebi

Shares of ZEE Entertainment Enterprises Ltd, or ZEEL, will be in news on Thursday morning, as the company settled a regulatory probe related to delays in disclosure of information regarding pledged shares. The media firm paid Rs 7 lakh to settle the proceedings under the Settlement Regulations, which allow entities to settle the matter without admitting or denying any wrongdoing.

ZEEL was under the scanner of the Securities and Exchange Board of India (Sebi) for alleged delay in disclosing invocation of pledged shares during the period January 1, 2019 to December 26, 2019.

“SEBI in its examination report observed that Applicant (ZEEL) has made delayed disclosure (54 days in 3 instances and 27 days in 2 instances) to Exchanges w.r.t. to invocation of pledged shares. Therefore, it was alleged that applicant has violated regulation 7(2)(b) of the PIT Regulations. Accordingly, SEBI has initiated adjudication proceedings under section 15A(b) of the SEBI Act against the Applicant,” stated the Sebi order.

The fresh development comes in as the MD & CEO Goenka and former chairman Subhash Chandra fights a battle against Sebi at the Securities Appellate Tribunal (SAT) after the former barred the duo from holding directorship in any listed company for allegedly abusing their positions in the company and siphoning off funds for their own benefit.

In an interview to ET NOW, Goenka said the merger between ZEEL and Sony will go ahead regardless of CEO Punit Goenka's position, as it will benefit 96 per cent of the company's shareholders. Sony remains committed to the December 2023 contractual deadline, though a September merger had been previously proposed. The companies are currently at an advanced stage of integration, but regulations and non-compete agreements remain obstacles, he told ET NOW.

To recall, ZEE Entertainment and Sony Picture Networks India had in December 2021 announced a definitive agreement for merger, which was largely similar to the non-binding agreement signed in September 2021. As per the definitive agreement, Sony would have hold 50.86 per cent, Essel Group 3.99 per cent and public shareholders 45.15 per cent stake in the merged company. As per the deal, Punit Goenka would have been the MD & CEO of the merged company and that the Essel Group’s was allowed to take its stake in the company potentially to 20 per cent from 4 per cent over time subject to regulatory approvals.

But Sebi has now barred Subhash Chandra and Punit Goenka from being directors or key management personnel in any listed firm, there were concerns over the Sony deal. The stock is down 26 per cent year-to-date.