Sony Taking ‘Very Seriously’ Indian Regulator’s Order Barring Zee Top Management Ahead of Merger

Weeks after India Securities and Exchange Board (SEBI) barred Zee Entertainment Enterprises (ZEEL) top brass from holding any managerial or directorial positions, Sony has responded.

On June 12, SEBI barred Punit Goenka and Subhash Chandra, MD-CEO and chairman emeritus respectively, of media giant ZEEL, from holding any managerial or directorial positions in listed companies. The suspension is while SEBI carries out investigations into allegations of insider trading.

ZEE has challenged the SEBI order at the Securities Appellate Tribunal and the matter will be heard on June 26.

In 2021, ZEEL and Sony Pictures Networks India (subsequently renamed Culver Max Entertainment) signed definitive agreements to merge the two entities to create an Indian broadcast giant, with Goenka to lead the merged entity as MD and CEO. The merger is pending approval from India’s National Company Law Tribunal.

Following the SEBI order, Indian media outlets have speculating about what the intervention might mean for the proposed merger. Some have suggested that the deal may collapse. Others say it will go through.

On Wednesday, SPE HQ in the U.S. issued a statement, saying: “There have been several erroneous press reports recently speculating about the future of ZEE’s planned merger with SPNI following SEBI’s interim order against Subhash Chandra and Punit Goenka. We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal.”

The SEBI order says that there is a “prima facie case of Mr. Subhash Chandra and Mr. Punit Goenka having abused their position as directors/KMPs of a listed company for siphoning off funds for their own benefit.”

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