The Securities and Exchange Board of India (SEBI) has issued a show-cause notice to Zee Entertainment Enterprises and members of its leadership, reviving allegations of fund diversion and corporate governance lapses, Bloomberg reported.
According to the Bloomberg report, the notice follows a multi-year investigation into the company’s internal financial transactions and is directed at both Zee and its chairman and chief executive officer.
Financialexpress.com could not independently verify this news. We have reached out to the company, and this copy will be updated as soon as they respond.
Zeel’s response
In a statement cited by Bloomberg, Zee said it had received a show-cause notice from SEBI in relation to allegations first raised in 2019. The company, as quoted by Bloomberg, described the probe as having been “unduly prolonged” and said it would respond formally to the regulator.
Merger fallout and industry shift
As per the Bloomberg report, the regulatory action comes after the collapse of Zee’s proposed merger with Sony Pictures Networks India.
At that time, the deal had faced legal and regulatory hurdles for two years and ultimately was called off in January 2024.
The Bloomberg report further mentioned that Zee said the investigation had disrupted its strategic plans, which include the merger, thereby leading to significant losses for shareholders.
The broadcaster reiterated that it denies the allegations and maintains that it adheres to high standards of corporate governance. The company is prepared to pursue legal remedies, as per the Bloomberg report.
In the meantime, Zee is navigating a media landscape that has become increasingly competitive. Bloomberg noted that the joint venture between Walt Disney Co. and Reliance Industries’ Viacom18 Media now commands a dominant share of cricket broadcasting rights in India.
Zeel Share Price
Zeel’s share price has been flat on Friday. The stock is up 10% in the past month. However, the stock fell 8.38% last year.