Indian Court Dismisses Plea By Zee Chairman And CEO Against SEBI Ban

An Indian court has dismissed the plea filed by the Chairman and CEO of Zee Entertainment Enterprises Limited (ZEEL), one of India's leading media conglomerates. The plea was filed in response to a ban imposed by the market regulator, Securities and Exchange Board of India (SEBI), on the Chairman and CEO from accessing the securities market, Reuters reported.

Chandra and Goenka were barred from listed company boardrooms by the Securities and Exchange Board of India (SEBI) on June 12 due to suspicions of fund misappropriation.

The regulator said in its decision that the two were actively involved in directing company funds to businesses connected to the group's initial shareholders and other listed corporations.

While rejecting to overturn the regulator's directives, the Securities Appellate Tribunal stated that it did not see any justification for interfering with the regulator's order and instructed the pair to defend themselves before SEBI.

The decision comes as Zed and a local division of Sony Group of Japan (6758.T) are nearing a merger that was initially proposed in 2021 to form a $10 billion TV company, with Goenka slated to serve as the merged entity's managing director and CEO. Regulator permissions, though, are still pending.

In contrast to Goenka's alleged claim that the merger will proceed "whether or not" he serves as the combined company's CEO, a Sony division had stated that it was monitoring developments that "may affect" the deal.

Following the decision, Zee's shares dropped as much as 5.7%. After losing 25.2% in 2022, the stock has lost 16.6% so far this year.