Zee, Sony India merger in peril again
June 14, 2023
By Chris Forrester
The long-awaited merger between Zee Entertainment Enterprises Ltd (ZEEL) and the former Sony Pictures Network (now renamed Culver Max Entertainment) is again suffering major challenges.
The latest problem came from The Securities & Exchange Board of India (SEBI) which has ruled that ZEEL’s Subhash Chandra and Punit Goenka cannot have seats on the merged company’s board of directors. Chandra founded ZEEL and Goenka (his son) was destined to be MD on the merged business.
On June 13th the pair announced that they would be challenging the SEBI ruling.
SEBI’s decision follows on from investigations made and which determined that the two had abused their positions as directors of Zee and had siphoned off cash for their own purposes.
“I am of the opinion that, while the investigation is still underway, their continuation as a director/Key Managerial Personnel in any listed company or its subsidiaries are likely to be prejudicial to the interest of those companies, particularly its investors,” SEBI member Ashwani Bhatia said in his order.
The allegations suggested that funds siphoned off were used to pay loans in place from another Chandra business, Essel Group.
One of the requirements in the ZEEL/Sony deal is that Goenka should remain as MD and CEO of the merged entity.