Securities and Exchange Board of India (SEBI) penalised Zee Entertainment Ltd (ZEEL) along with its promoters Subhadh Chandra and Punit Goenka ₹1.5 crore and barred them from the stock market for one year for diverting company assets to benefit promoter-linked entities.

In SEBI’s final order, the quasi-judicial authority N. Murugan found that promoter-owned entity Essel Group pledged ZEEL’s Hyderabad property to borrow ₹726 crore from IHFL and used the funds without board and audit committee approval. ”Further SEBI also concluded that Goenka had failed to prevent the use of the asset or disclose it to the Board, the Audit Committee and the statutory auditors, despite allegedly having knowledge of the transaction. The alleged related-party nature of the transaction was also not disclosed in the financial statements for these years. The borrowing entities were not identified as related parties, and the use of ZEEL’s property for securing their obligations was not reported as a related-party transaction under Ind AS-24,” SEBI said.

ZEEL also failed to disclose material developments to investors, stock exchanges or in the financial statements for years, violating disclosure regulations. Further, SEBI found that Mr. Goenka had signed the CEO-CFO certificate furnishing incorrect, false and misleading information to the shareholders of ZEEL.

After concluding that the notices had violated unfair trade practices and disclosure regulations, SEBI barred ZEEL from the stock markets for two months and issued notices to Mr. Goenka and Mr. Chandra for 12 months each. Further, SEBI also fined ZEEL ₹30 lakhs, Mr. Goenka ₹58 lakhs and Mr. Chandra ₹60 Lakhs. The notices were also directed to close any open derivative positions within three months since the order is received or on expiry, whichever is earlier. The noticees were further directed to pay the penalty within 45 days from the date of receipt of the final order.

Markets regulator SEBI on Friday (July 31, 2026) said the off-market sale of unlisted equity shares by an existing shareholder through private negotiations will not be treated as a deemed public issue, provided the number of purchasers does not exceed the statutory limit of 200 persons in a financial year.

The clarification came in an informal guidance letter issued to IDBI Bank, which had sought SEBI’s view on whether its proposed sale of unlisted equity shares to non-qualified institutional buyers through off-market transactions would be regarded as a public offer under securities laws.

SEBI, in its informal guidance made public on Friday (July 31, 2026), said that these transactions are secondary transfers by an existing shareholder and do not constitute an offer or invitation by the company to subscribe to securities. Accordingly, these transfers would not trigger public issue requirements, subject to compliance with the prescribed limit on the number of purchasers.

The regulator further clarified that contractual rights such as the right of first refusal (ROFR) available to company promoters can be honoured while carrying out such share transfers.

The Companies Act does not mandate or restrict the categories of persons to whom the placement/ tansfer can be made by a company, but restricts the number of persons in a private placement. While calculating the number of persons for deciding whether the offer is made to over 200 or not in a financial year, the said provisions allow placement made to QIBs to be excluded.

Hence, the transfer can be made through a non-advertised privately negotiated transaction to identified investors, including non-QIB investors, provided the transfer is made up to the prescribed limit of 200 persons in a financial year, so it is not construed as a deemed public issue, SEBI added.

IDBI Bank had approached SEBI in May seeking clarity on the regulatory treatment of its proposed divestment of unlisted equity investments through negotiated off-market transactions.