In an interim order, the Securities and Exchange Board of India (SEBI) has barred Subhash Chandra Goenka, the chairman of Essel Group, and his son Punit Goenka, who serves as the MD and CEO of Zee Entertainment Enterprises (ZEEL) from holding any directorship or key managerial positions in any listed company, citing their abuse of board positions in Zee for personal gain. 

The regulator has directed Zee to present the order before its board within seven days, while the Goenkas have been given 21 days to respond. Following the order, shares of ZEEL experienced a sharp decline of over 6% on the NSE. 

The SEBI order may cause delays and present a significant setback for Zee’s proposed merger with Sony Pictures Networks India. Additionally, Goenka’s senior role in the merged entity may be compromised due to the SEBI order. The interim order issued by SEBI can be modified in the future if suitable clarifications are provided by the individuals involved. 

SEBI’s investigation was triggered by the resignations of two independent directors from Zee’s board in 2019, where concerns were raised about Yes Bank’s misappropriation of fixed deposits. 

The subsequent probe found that Subhash Chandra had provided a letter of comfort to Essel Group Mobility which allowed Yes Bank to appropriate a fixed deposit of ₹200 crores from Zee Entertainment to fulfil the obligations of seven entities connected to the promoter family.

At 12:45 pm, shares of Zee Ltd were trading at Rs 193.55, down 0.67% from the previous closing price. The stock reached an intraday low of Rs 184.15, nearly 5.3% lower than the last day’s closing price.