SEBI bars Zee’s Subhash Chandra, Punit Goenka from company boards; Subhash Chandra, Punit Goenka sentenced to charges of misuse of funds
What was revealed in the SEBI investigation?
In its 16-page order, Sebi said two independent directors of Zee Entertainment had resigned from the board in 2019, alleging that fixed deposits of Zee Entertainment were being used improperly to repay loans of other Essel Group companies. SEBI issued this order today after investigating the matter.
Cases of misappropriation of fundswhat
Sebi’s investigation revealed that Essel Group chairman Subhash Chandra had issued a letter of comfort (LOC) to Yes Bank on September 4, 2018. The LOC was issued as a guarantee for loans taken by Yes Bank on behalf of other Essel Group companies. In the letter, it was stated that a fixed deposit of Rs 200 crore will be kept by the group company with Yes Bank in lieu of a loan of Rs 200 crore to Essel Green Mobility. It was also clarified that Yes Bank can adjust against the FD loan in case of default.
SEBI: Investors are about to be cheated! Karvi OUT from stock broking market, SEBI’s big action
Owing to the LOC, Yes Bank adjusted Zee Entertainment’s FD of Rs 200 crore in lieu of loans to 7 Essel Group companies. Although ZEEL informed SEBI that the group companies had returned the money to Zee Entertainment, the funds were transferred to Zee Entertainment’s account from Zee Entertainment along with other listed companies of the group, SEBI’s investigation revealed.
Misappropriation of funds was done in a very planned manner. In some cases, it was also found that 13 entities were used to facilitate transactions, Sebi wrote in its order. Sebi’s investigation found that Rs 143.90 crore from Zee Entertainment and other listed companies were returned to Zee Entertainment’s account through various companies. Meanwhile, SEBI is still investigating the remaining funds.
