SEBI rejects settlement plea by ZEE, Punit Goenka; to proceed with probe

The market regulator SEBI has rejected ZEE Entertainment Enterprises and its CEO Punit Goenka's settlement applications and has decided to proceed with its probe into both of them and Essel Group Chairman Subhash Chandra.

"The panel of whole-time members of SEBI rejected the settlement applications and also referred the matter to SEBI for further investigation. Subsequent to completion of the investigation, it has been decided by the competent authority to proceed against the noticees under Section 11B of SEBI Act 1992," the latest SEBI order says.

Amit Kapoor, Adjudicating Officer, SEBI, in the latest order, says the allegations in the show-cause notice dated July 06, 2022, are to be subsumed with the findings of the further investigation carried out by SEBI.

Accordingly, the content of the show-cause notice, including the examination report and all the relied-upon documents, will be treated as an "integral part" of the probe into ZEEL.

The regulator had initiated adjudication proceedings against Zee Entertainment Enterprises Ltd and Subhash Chandra, former chairman, ZEEL, and Punit Goenka, former MD, for the alleged violations of various provisions of the listing obligations and disclosure requirements (LODR) regulations.

SEBI had appointed Parag Basu as the Adjudicating Officer (AO) in the case and the matter was re-assigned due to the transfer of appointed AOs. The undersigned was appointed as AO on December 27, 2024.

SEBI says a show cause notice on July 06, 2022, was issued asking why an inquiry should not be held against ZEEL, Chandra and Goenka, and why a penalty should not be imposed on them. Subsequently, ZEE and Goenka filed settlement applications to settle the adjudication proceedings.

Notably, SEBI rules allow entities against whom proceedings have been initiated to apply for settlement by paying a certain fee or by complying with the rules.

The development comes days after shareholders of ZEE rejected a proposal to reappoint Punit Goenka as director. In the 42nd annual general meeting (AGM) of ZEEL held on November 28, 2024, a resolution for the reappointment of Goenka as director was defeated as the shareholders rejected the proposal. As per the exchange filing, 49.54% of votes were cast in favour of the resolution while 50.4% voted against it.

Earlier on November 18, Goenka had resigned as the MD of ZEEL, which was accepted by the board. However, he was appointed as CEO to focus entirely on operational responsibilities.