Ministry of Corporate Affairs has ordered an inspection of the financial statements and books of accounts of Zee Entertainment Enterprises Limited (ZEEL) after looking into complaints raised by shareholders and independent directors.

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"The inspection has been ordered under Section 206 (5) of The Companies Act. Western Regional Director of the Ministry has been assigned the inspection," sources added.

Section 206 of Companies Act refers to the power to call for information, inspect books and conduct inquiries.

"MCA will be inspecting the allegations of corporate governance lapses and after some, its independent directors quit in November," sources added.

The inspection will include, probe into the company’s books and recording of statements of the company management in the same regard.

Zee Entertainment said it has adhered to the highest levels of corporate governance and maintained transparency across all aspects. "The Ministry of Corporate Affairs (MCA) has asked to furnish certain information under section 206 of the Companies Act for their inspection. However, the same is not related to any Corporate Governance issue whatsoever," according to a statement by a company spokesperson.

It was on November 27, when Zee had announced the resignation of independent directors Sunil Sharma and Neharika Vohra, and non-independent director Subodh Kumar.

According to a release filed with the exchanges, Sharma tendered his resignation on November 24 citing the sale of shares by the promoter group and the reconstitution of the board. Kumar and Vora listed several reasons for their resignation and accused the company of handing out film advances, promoter loans and being lax on corporate social responsibility (CSR) spending.

The company has denied all wrongdoing.

First Published:Feb 4, 2020 4:22 PM IST