Zee Entertainment seeks Sebi relief to unlock ₹1,200 crore mutual fund investments | Company Business News
Zee Entertainment seeks Sebi relief to unlock ₹1,200 crore mutual fund investments
Zee Entertainment Enterprises Ltd on Wednesday asked the Securities Appellate Tribunal (SAT) to lift the Securities and Exchange Board of India’s (Sebi’s) market-access ban, saying it needs to sell about ₹1,200 crore of liquid mutual fund investments to fund day-to-day operations.
Responding to the tribunal’s question on why the company wanted to sell the investments, Zee’s counsel said the funds would be used mainly for short-term business requirements: “For making films, paying people, creditors.”
The plea comes as Zee challenges Sebi’s 31 July order barring the company from accessing the securities market for two months. The order also restrained chief executive officer Punit Goenka and promoter Subhash Chandra from accessing the market for 12 months each.
Also Read|Sebi order against Zee likely to delay planned ₹3,143-crore fundraise
The tribunal questioned Sebion why Zee should be prevented from raising funds for two months if the proposed transaction could otherwise be completed after the ban expires. “If there is no illegality in raising the money after two months, and in the teeth of this order it is to be stopped in a securities market, what is the logic?” the tribunal asked.
Emailed queries to Sebi and Zee remains unanswered until press time.
Funding squeeze
Zee’s counsel said the company was supposed to raise almost ₹3,100 crore, but the market-access ban had affected the fundraise as the share price had fallen. He said the fundraise would benefit public shareholders, who hold around 96% of the company.
Counsel appearing for Goenka separately alleged that Sebi’s order had pushed down the share price, meaning the fundraise would now take place at a lower valuation than originally finalised.
On 31 July, Zee’s shareholders approved a ₹3,143.5-crore fundraising plan that would increase the promoter’s stake to 23.79%, from around 4% currently.
Zee shares on the National Stock Exchange fell from ₹114.55 on 31 July to ₹98.10 on Wednesday.
Also Read|Zee promoter family aims to raise stake, infuse ₹3,143 crore
Sebi has opposed Zee’s plea, arguing that the matter involved serious violations by the company’s promoters, who allegedly used properties of the listed company as security for loans taken by privately held promoter entities.
“A property owned by a listed company to cover security in respect of their private loans taken by their private companies,” the regulator’s counsel said.
According to Sebi, Zee’s statutory auditor had reported that the original title deeds of certain properties were not available with the company.
The case stems from Sebi’s findings in its 31 July final order that a property owned by Zee was allegedly used as security for loans taken by promoter-linked private companies. The transaction took place in December 2018 and, according to the regulator, was carried out without the required approvals and disclosures, while the company’s management failed to properly inform shareholders about the arrangement.
Also Read|Zee drags Blinkit to Delhi HC over alleged Instagram copyright infringement
Sebi’s order said Zee was required to disclose the “fraudulent and unauthorized pledging” of the Hyderabad land to the stock exchange and on its website. “Zee failed to make the said disclosure.”
After hearing both sides, the tribunal reserved its order and asked Sebi to file its reply within six weeks.
About the Authors
Yash Tiwari is a Mumbai-based journalist who reports on corporate and regulatory developments, with a focus on court-driven policy shifts and the intersection of law and public policy. He has been in the profession for two years. Before joining Mint, he worked at NDTV Profit as an assistant producer on the TV desk while also reporting, gaining experience across television and print journalism and combining reporting with production expertise.<br><br> Born in Kolkata, a city he remains deeply connected to, Yash has a keen interest in the technicalities of Indian law and aims to decode complex legal developments in a clear and accessible manner for readers. He is a graduate of the Asian College of Journalism, Chennai, where he completed his postgraduate diploma in journalism.<br><br> He closely follows politics and government policies, and has covered several state elections as a freelance journalist. His work is driven by the idea of making law less intimidating and more understandable for the general public.<br><br> When not at work, Yash can be found playing cricket, revisiting classic matches, or engaging in conversations about the evolving landscape of law and policy in India.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
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