Sebi Probes Zee Entertainment Fund Diversion Allegations, India

Securities and Exchange Board of India (Sebi) has summoned former directors of Zee Entertainment Enterprises Ltd (ZEEL) for questioning regarding alleged funds diversion. The investigation into the entertainment company includes related-party transactions and a wider array of dealings between Zee and private companies owned by promoters. Two former independent directors have been asked to testify in connection with the probe, with Sebi focusing on the role of prominent Mumbai-based production houses as potential conduits for fund diversion. Zee has denied rumors of accounting issues and is cooperating with Sebi’s requests for information. Following Sebi’s interim order against Zee promoters Subhash Chandra and Punit Goenka, which was later overturned by the Securities Appellate Tribunal, the regulator continues its inquiry into the matter. Sebi is trying to determine whether the former directors were aware of funds being diverted through the issuance of letters of comfort by promoters and if any board members were complicit in the transactions. In the interest of investor protection, Sebi issues interim orders in cases of high priority to prevent the accused from affecting capital markets pending the final investigation.