The Zee Entertainment Enterprises Limited (ZEEL) and its top management are under SEBI scrutiny for alleged violations of disclosure norms and initially a show cause notice was issued to them in July 2022. File
| Photo Credit: Reuters

Markets watchdog Securities and Exchange Board of India (SEBI) on Thursday (January 2, 2025) said it will slap a fresh show cause notice on Zee Entertainment Enterprises Limited (ZEEL) founder chairman Subhash Chandra, and his son Punit Goenka as it vowed to continue the investigation into alleged violation of listing norms against the media baron and his company.

The order passed by SEBI’s adjudicating officer said the contents of the earlier Show Cause Notice (SCN) issued to them will also be incorporated “in the SCN to be issued in the instant matter”.

The ZEEL and its top management are under SEBI scrutiny for alleged violations of disclosure norms and initially a show cause notice was issued to them in July 2022.

Following the July 2022 show cause notice, Zee Entertainment Enterprises Ltd (ZEEL) and Punit Goenka filed settlement applications with the SEBI.

However, the application to settle the adjudication proceedings was rejected by a panel of whole-time members of SEBI and the matter was referred to the markets watchdog for further investigation.

“In this regard, it has been observed that subsequent to completion of investigation in the instant matter, it has been decided by the competent authority to proceed against the noticees under Section 11B of SEBI Act 1992,” the order said.

Section 11B pertains to SEBI’s powers to issue notices and impose penalties.

The order further said, “the content of the SCN dated July 6, 2022 issued by the Adjudicating Officer (AO) including the examination report and all the relied upon documents will be treated as integral part of the further investigation report by SEBI in the matter of ZEEL”.

Zee Group Chairman Subhash Chandra’s son Punit Goenka.
| Photo Credit: PTI

The shareholders of Zee Entertainment have rejected a proposal for the reappointment of Punit Goenka as director, according to a regulatory filing by the company.

The filing by Zee Entertainment Enterprises Ltd (ZEEL) stated that the resolution for the reappointment of Mr. Goenka was defeated in the annual general meeting (AGM) of the company.

Resolution number three in the AGM, which proposed the reappointment of Mr. Goenka as director, was supported by only 49.54% of the total number of votes cast while 50.4% voted against the resolution.

“Resolution No. 3 [Goenka’s reappointment] failed to get the requisite majority of votes as required under the provisions of the Companies Act, 2013, and SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015,” ZEEL said.

This is a major setback for Mr. Goenka who is currently the CEO of the company. Several proxy firms had earlier advised the shareholders to vote against resolution number three.

However, the three other resolutions for adopting the financial statement for FY’24, declaring a dividend, and ratification of remuneration to cost auditors were passed.

“Except for resolution number three, all the aforesaid resolutions were passed with requisite majority,” it said.

The Companies Act, 2013, mandates a simple majority of (50% plus one) votes to pass an ordinary resolution at an annual general meeting.

Earlier this month Punit Goenka, had resigned from the post of managing director of ZEEL. However, he continued as CEO of the media and entertainment major. He had also withdrawn himself from reappointment for the said post in the AGM.

While sharing Mr. Goenka’s resignation letter to exchanges last week, Zee Entertainment said he is “withdrawing his consent for his re-appointment as managing director of the company as proposed in the notice of the ensuing annual general meeting”.

On October 18, the board of ZEEL approved the proposal for Mr. Goenka’s reappointment for a five-year term, effective from January 1, 2025, to December 31, 2029.