India's capital markets regulator, the Securities and Exchange Board of India (SEBI), has barred Zee Entertainment Enterprises Limited (ZEEL) founder Subhash Chandra and Chief Executive Officer Punit Goenka from accessing the securities market for a period of one year. The enforcement action relates to the unauthorized pledging of company-owned land to secure loans taken by the promoter group.

In addition to the one-year ban on Chandra and Goenka, SEBI imposed a monetary penalty of ₹30 lakh on ZEEL and prohibited the company itself from accessing the securities market for two months.

SEBI is the statutory regulatory body responsible for overseeing India's securities and capital markets, with authority to investigate and penalize violations of securities laws. The case underscores the regulator's ongoing focus on related-party transactions and the misuse of listed-company assets by promoter groups, an area that has drawn increased enforcement attention across India's corporate sector.

Separately, ZEEL shareholders have approved a convertible warrant issuance that will raise the promoters' stake in the company substantially. This shareholder approval comes after investors had previously rejected a similar proposal.

The regulatory action against Zee's leadership adds to a series of corporate governance challenges the company has faced. ZEEL, founded by Chandra in 1992 and one of India's largest media and entertainment conglomerates, has been under regulatory scrutiny over transactions involving the promoter group. The company also saw its proposed merger with Sony Pictures Networks India collapse in January 2024 after more than two years of negotiations, a deal that would have created one of India's largest media entities.

Source: Economic Times Markets