SEBI Bars Zee Promoters Subhash Chandra And Punit Goenka From Company Boards

India's market regulator, the Securities and Exchange Board of India (SEBI), has barred Subhash Chandra and Punit Goenka, the promoters of Zee Entertainment Enterprises Limited (ZEEL), from holding positions on the company's board, Reuters reported.

The decision comes after an investigation by SEBI into alleged irregularities and violations of corporate governance norms by ZEEL.

According to experts, the news could cause a delay in Zee's intended merger with Sony Pictures Networks India (SPNI), currently known as Culver Max Entertainment.

The SEBI stated in its ruling that Chandra, previous chairman of Zed, and Goenka, managing director and CEO of Zed, were actively involved in diverting company cash to the group's other listed organisations and firms associated with initial shareholders.

They were also direct beneficiaries of the fund diversion, according to the regulator.

The lawsuit involves Chandra's letter of comfort on behalf of connected firms seeking loans from Yes Bank.

The firms then defaulted on their loan obligations, prompting Yes Bank (YESB.NS) to seize Zee's fixed deposits in lieu of payment.

Despite the fact that Chandra's enterprises settled their loans, the SEBI stated that representations about the repayment were incorrect and deceptive.

A Zed spokeswoman could not be reached for comment immediately.