Shares of Zee Entertainment Enterprises plunged as much as 8 percent to hit a fresh 52-week low in Tuesday's trade, day after the Securities Appellate Tribunal (SAT) adjourned the media giant's plee against a Sebi (Securities and Exchange Board of India) order till June 26. The scrip was trading 6 percent lower at Rs 174.20 apiece during late noon deals.

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ZEEL shares opened at Rs 185.50 apiece, and went on to hit a one-year low of Rs 172.85 on BSE. The stock has slipped 12 percent in the last five trading sessions and is down 28 percent so far this year. On NSE, the stock saw 2.46 crore shares worth Rs 439 crore changing hands so far, while a total of 21.52 lakh shares changed hands on BSE against a two-week average of 6.96 lakh shares.

SAT in its June 19 hearing said that it will hear on June 26 Zee MD and CEO Punit Goenka’s plea challenging Sebi's interim order, which bars them from holding the position of a director or key managerial personnel in any listed company.

The counsel appearing on behalf of Goenka asked for a stay on Sebi's order and said that the capital markets regulator has no evidence beyond bank statements to prove allegations of round-tripping of funds, and it cannot pass ex parte order.

Recently, Sebi alleged that Zee had faked the recovery of loans owed by its founder Subhash Chandra’s private entities. He and his son Punit Goenka had siphoned off funds “for their own benefit,” the market regulator said, barring them from executive or directorial positions in listed firms.

Chandra and Goenka have appealed the order on the grounds that the regulator didn’t hear their side of the story. The Sebi has doubled down by filing a 197-page reply.

Sebi, in its reply, in the matter of Zee to SAT has noted that Chairman Emeritus Subhash Chandra and Goenka of this large listed firm have diverted public money to private entities.

"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," news agency IANS quoted Sebi as saying in its reply to SAT.

Zee-Sony merger

The legal drama creates a fresh problem for Sony. IANS had earlier reported that Sony's board of directors is said to be unhappy with the recent developments and is looking at invoking force majeure and material adverse clause in the shareholder agreement in the proposed merger with Zee Entertainment in India.

Sebi has given a No Objection Certificate (NOC) to the Composite Scheme of Merger in the matter of ZEEL and Sony Pictures Networks India (Sony), which is one of the largest integrations of industry majors in the media industry and entails an incoming foreign direct investment of $1.7 billion (approximately) into India.

(Edited by : C H Unnikrishnan)

First Published:Jun 20, 2023 3:16 PM IST