Zee Group’s Subhash Chandra Accuses Indian Regulatory Chief of Sinking Company’s Merger With Sony

As a seasoned cinephile who has witnessed the intricate dance of power and politics within India’s booming entertainment industry for decades, I find myself both bewildered and disheartened by the latest developments surrounding Subhash Chandra and Zee Entertainment Enterprises Ltd (ZEEL).

Subhash Chandra, former chairman of Zee Entertainment Enterprises Limited (ZEEL), a significant media company in India, has leveled allegations against Madhabi Puri Buch, head of the Securities and Exchange Board (SEBI), claiming that she blocked the proposed merger between ZEEL and Sony.

During a news conference on Monday, Chandra asserted that Buch is not only corrupt but also vengeful. He claimed that the primary cause behind the collapse of the merger between Zee and SEBI was Buch’s actions.

In June 2023, the Securities and Exchange Board of India (SEBI) prohibited Punit Goenka, Managing Director and Chief Executive Officer of ZEEL, as well as Chandra, from holding any managerial or directorial roles in listed companies. This ban was enacted while SEBI was conducting investigations into accusations of insider trading. The SEBI notice contained numerous references to the alleged “diversion” of funds. However, India’s Securities and Appellate Tribunal (SAT) overturned the SEBI decision in November. According to Chandra, who spoke on Monday, the SAT’s order essentially implies that there is a strong bias against this group, although they did not explicitly state total prejudice.

The merger was cancelled back in January of this year. In February, Bloomberg published a report suggesting that SEBI had discovered an inconsistency worth approximately $241 million in ZEEL’s financial records, prompting a summons for the company founders. However, ZEEL denied these claims, stating that reports and rumors about accounting irregularities within the company are untrue and baseless.

On Monday, Chandra stated that while the merger was ongoing, he penned a letter to India’s Finance Minister Nirmala Sitharaman expressing his concerns about Madhabi Puri Buch allegedly obstructing the Zee-Sony merger. He claimed he had made this clear, but did not receive a reply.

Chandra has decided to initiate a legal response towards the ongoing SEBI probe, expressing concerns about potential bias. He stated, “I prefer not to be questioned by someone who might be biased. Feel free to have me examined by anyone, any external entity, or any impartial party.”

Chandra’s claims against Buch stem from similar charges leveled by the Indian political party, Congress. They claim that Buch simultaneously holds a remunerated post at ICICI Bank and has received approximately 2 million dollars in advantages from the bank and its affiliated entities.

In my perspective, I believe SEBI has not been upholding the best interests of ZEE Entertainment’s investors. The progressing merger between ZEE and Sony was receiving approval from both SEBI and the stock exchanges. However, instead of allowing this merger to proceed smoothly, SEBI reportedly directed BSE/NSE to interfere in NCLT proceedings and undermine the merger by causing uncertainty for Sony. As a result of these actions, the merger was ultimately called off by Sony, leading to substantial losses for minority shareholders like myself. This is the essence of my statement following the press conference.

“Considering the circumstances, I’ve chosen not to collaborate with SEBI any longer in my personal role. I hold no regard for them. I recommend that Zee Entertainment also discontinue their cooperation with SEBI; as the investigation appears biased, driven by a presumptive mindset of the SEBI chairperson.”

2024-09-02 17:46

Zee Group’s Subhash Chandra Accuses Indian Regulatory Chief of Sinking Company’s Merger With Sony

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