Zee Ent’s Punit Goenka pays Rs 50 lakh to settle insider trading case with SEBI

In August 2021, the capital market regulator had issued an ad-interim order against 15 entities for carrying out insider trading activities in shares of Zee Entertainment.

During its course of investigation, SEBI found that certain information which was “unpublished price sensitive information” had not been considered by the media company.

This pertains to the launch of cinema-to-home service, ZEEPLEX, by the company in September 2020, which is a pay per view service.

SEBI concluded that the launch of such a service amid Covid restrictions was an ‘expansion of business’ and the information related to business expansion is covered under the disclosure norms.

Goenka, being at the helm of the company, was alleged of failing to put in place adequate internal controls to identify relevant business information and disclosures.

Subsequently, SEBI issued a show cause notice against Goenka on December 22, 2022.Goenka proposed to settle the proceedings, without admitting or denying the findings of fact and conclusions of law.

Through payment of the above-mentioned amount, Goenka has settled the matter and SEBI has disposed of the case against him.

While the matter may not be very significant, it removes the dust over corporate governance issues.

The settlement also comes at a time when the merger process between Zee Entertainment and Sony Pictures is ongoing. The merger has already been delayed due to regulatory impediments.

Last month, Zee reached a settlement with IndusInd Bank to stop insolvency proceedings against the company.

In February, the National Company Law Tribunal (NCLT) had admitted an insolvency petition filed by IndusInd Bank against Essel Group’s listed companies, Zee Entertainment and Siti Network.

IndusInd Bank in its plea claimed a default of Rs 83.08 crore against the media and entertainment firm promoted by Subhash Chandra.

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