Zee Entertainment settles insider trading breach case with Sebi, pays Rs 7 lakh

Mumbai, Jun 21, 2023

Synopsis
The case pertained to delayed disclosure of invocation of pledged shares to the exchanges, which meant the company violated the prohibition of insider trading norms.

Zee Entertainment Enterprises has reached a settlement with the Securities and Exchange Board of India (Sebi) with respect to alleged insider trading norm breach in 2019, and has paid Rs 700,000 towards the same.

The case pertained to delayed disclosure of invocation of pledged shares to the exchanges, which meant the company violated the prohibition of insider trading norms.

Sebi conducted a probe into the shares of Zee Entertainment in the period between January and December 2019, to ascertain any possible violation of regulations.

The market regulator observed that the applicant had delayed disclosure to exchanges with respect to invocation of pledged shares of promoters.

The regulator then initiated adjudication proceedings against the company and appointed an adjudicating officer to conduct proceedings and impose penalties, if deemed fit.

However, Zee Entertainment proposed to settle the pending proceedings, without admitting or denying the findings of fact through a settlement order.

In April, the regulatory committee agreed and approved the payment made by the company, and subsequently disposed of the proceedings.

The settlement is among a series of proceedings settled by the company in recent months. While Zee has managed to close one case with Sebi, its founders are battling another major case with the regulator, which may decide the fate of the company’s merger deal with Sony Pictures.

The deal, signed in late 2021, has seen an unexpected delay due to Zee’s legal battle with lenders over loan defaults and reports that stock exchanges were reconsidering approvals for the merger.

Adding to the woes was the interim order by Sebi last week barring Chairman Emeritus Subhash Chandra and MD and CEO Punit Goenka from holding any directorial positions until further notice.

The Goenkas have appealed to the Securities Appellate Tribunal against the interim order, and the tribunal will hear it later this month.

A relief on this particular order is significant as one of the key conditions of the merger deal is that Goenka will be heading the merged entity.

[The Economic Times]