Zee is re-engaging with Sony to assess whether the merger can be revived.
The markets regulator has found irregularities of over $240 million in the accounts of Zee Entertainment Enterprises Ltd, dealing another blow to the embattled media firm less than a month after its merger with Sony Group Corp’s local unit. Zee shares fell.
As part of its investigation into the Zee founders, the Securities and Exchange Board of India, or Sebi, found that about 20 billion rupees ($241 million) may have been embezzled from the company, said people familiar with the matter who declined to be identified. Wanted. Will be identified as the information is not yet public. This is about ten times higher than the initial estimate by SEBI investigators, the people said.
Zee shares fell as much as 15% in Mumbai trading, the most in a month, before paring some of the losses. The benchmark S&P BSE Sensex was marginally higher, according to data compiled by Bloomberg.
The amount found missing is not final and may change after Sebi reviews the responses of company officials, the people said. He said the regulator is calling senior officials, including Zee’s founders, Subhash Chandra, his son Punit Goenka and some board members, to clarify its stand.
A SEBI representative did not immediately respond to an emailed request for comments. A Zee spokesperson declined to comment on the fund diversion, but said in an email that the company is in the process of providing all comments, information or clarifications requested by the markets regulator in the ongoing investigation.
Sebi’s latest findings have added to Mr Goenka’s troubles as the Zee CEO tries to reassure investors after the failure of his $10 billion merger plan with Sony. The two-year transaction was closed in January after a months-long standoff over who would lead the new entity.
The Economic Times reported on Tuesday that Zee is re-engaging with Sony to assess whether the merger can be revived but major differences remain, without specifying where it got the information. The Indian media firm clarified in a filing late Tuesday that it is not involved in any talks to revive the Sony deal.
a lot of conflict
Sony and Zee have been at loggerheads since mid-2023 due to a regulatory probe into alleged financial irregularities by the father-son duo. This made Sony wary of giving Goenka the lead of the merged entity, which Mr Goenka refused to give in as he was promised the CEO position in the 2021 merger agreement. The impasse eventually led Sony to cancel the deal in January.
Sebi, in an order in August, had barred Zee’s founders – Mr Chandra and Mr Goenka – from holding executive or director positions in any listed firm after it found that they had “abused their position” and ” had misappropriated funds for his own benefit.
Zee appealed against the Sebi order to a higher appellate authority and got partial relief in October, allowing Mr Goenka to continue in his executive position while the investigation continued.
The merger will help give Sony access to Zee’s deep library of content in regional Indian languages, while improving Zee’s financial position. Zee’s full-year profit fell 95% in the twelve months to March 31. It reported a profit of Rs 585.4 million for the quarter ended December 31, but missed analyst estimates.
Follow us on Google news ,Twitter , and Join Whatsapp Group of thelocalreport.in
