According to recent reports, the Securities and Exchange Board of India (SEBI) is investigating the involvement of two well-known Mumbai-based production houses as potential “conduits” in a financial probe.
As per sources cited by Moneycontrol, the Securities and Exchange Board of India (SEBI) has reportedly summoned numerous ex-directors of Zee Entertainment Enterprises Ltd (ZEEL) in connection with its investigation into the alleged diversion of company funds via related-party transactions.
According to a source quoted in the report, “Two former independent directors have been summoned by SEBI to testify, both of whom departed from the company’s board around 2021.” Additionally, the regulatory authority has expanded its investigation’s scope to include “a broader range of entities that engaged in business with ZEEL in recent years,” the report stated. Another individual mentioned in the report suggested that SEBI is examining the potential involvement of two prominent Mumbai-based production houses as “conduits used to divert funds.”
According to the report, the first source stated, “Some of the former directors, including independent directors, have been contacted to appear before SEBI. They have also been requested to furnish specific documents related to the duration of their tenure on the company’s board.”
Despite a denial by a Zee spokesperson, who refuted reports of accounting issues at the company as “incorrect and false,” stating, “Pursuant to the SAT order, which granted relief to the current key managerial personnel, the company has been in the process of providing all the comments, information or explanation requested by SEBI and has extended complete cooperation on all aspects.”
The shares of Zee Entertainment witnessed a decline of over 10% following reports suggesting that SEBI had uncovered potential diversion of approximately $241 million by the company’s promoters.