ZEEL's stock rises after SEBI rejects settlement applications

Zee Entertainment Enterprises (ZEEL) saw a 2.10% rise in its stock price, reaching Rs 126.55 after the Securities and Exchange Board of India (SEBI) rejected the settlement applications filed by the company and its Managing Director, Punit Goenka.

On Thursday, SEBI issued a three-page order in which it dismissed the show-cause notices (SCNs) that were issued against ZEEL, its founder Subhash Chandra, and his son Punit Goenka for alleged violations of SEBI regulations. Despite this, SEBI stated that the allegations in the show-cause notices would now be merged with an ongoing investigation into the company.

Subhash Chandra, who is the former chairman and director of ZEEL, and Punit Goenka, who serves as the executive director, CEO, and MD of the company, were named in the SCNs. The SEBI order clarified that the findings from the ongoing investigation would include the allegations raised in the SCNs issued on July 6, 2022.

The order mentioned, “The allegations in the SCN dated July 06, 2022, issued by AO are to be subsumed with the findings of the further investigation carried out by SEBI in the instant matter. Accordingly, the content of the SCN dated July 06, 2022, issued by the AO including the examination report and all the relied-upon documents will be treated as an integral part of the further investigation report by SEBI in the matter of ZEEL.”

This means that the ongoing investigation will now cover the issues raised in the previous notices. The company had been facing adjudication proceedings under Section 23E of the Securities Contracts (Regulation) Act, 1956, which was assigned to Adjudicating Officer Parag Basu on October 28, 2021, and later reassigned to Amit Kapoor on December 27, 2024.

The order further stated, "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 Notices under Section 11B of SEBI Act 1992."

ZEEL’s stock price has been under pressure in the past year, especially following the termination of its merger deal with Sony Group. The company’s shares have fallen nearly 60% over the last 12 months.