Zee Chief blames the Indian regulator for the failure of the Sony merger
Subhash Chandra, chairman emeritus of Indian media giant Zee Entertainment Enterprises Ltd (ZEEL), has accused Madhabi Puri Buch, chairman of the regulator Securities and Exchange Board (SEBI), of trying to thwart the Sony-ZEEL merger.
At a press conference on Monday, Chandra alleged that Buch is “corrupt” and “vindictive” and that Zee’s problems with SEBI were the “main reason” the merger failed.
In June 2023, SEBI banned ZEEL MD CEO Punit Goenka and Chandra from holding management or director positions in listed companies. The suspension came while SEBI was investigating allegations of insider trading. The SEBI notification repeatedly referred to “siphoning” of funds. India’s Securities and Appellate Tribunal (SAT) quashed the SEBI order in November. “They put everything aside. If you read the order, they are not saying there is total prejudice against this group,” Chandra said on Monday.
The merger was canceled in January this year. In February, a Bloomberg report claimed that SEBI had found a discrepancy of about $241 million in ZEEL’s accounts and that the company’s founders were summoned for questioning. “Reports and rumors about accounting issues within the company are incorrect and false,” was ZEEL’s response at the time.
On Monday, Chandra said that while the merger was still underway, he wrote to Indian Finance Minister Nirmala Sitharaman: “I told her that Madhabi Puri Buch is acting against the Zee-Sony merger, clearly, in so many words, But [got] no response.”
Chandra now plans to take legal action against the SEBI investigation, which is still ongoing. “I don’t want to subject myself to this investigation by a corrupt person. You can have me investigated by anyone, by any third party, by any independent party,” Chandra said.
Chandra’s allegations against Buch follow allegations by India’s opposition Congress party that Buch also holds a paid position at ICICI Bank and has received $2 million in benefits from the bank and its subsidiaries.
“SEBI has not acted in the interest of investors of ZEE Entertainment. The merger with ZEE Sony went well and they had received approval from SEBI/Beurs. Nevertheless, SEBI instructed BSE/NSE [Bombay Stock Exchange/National Stock Exchange] to intervene in NCLT [National Company Law Tribunal] proceedings and scuttling the merger by scaring Sony. Ultimately, the merger was terminated by Sony, resulting in the erosion of the vast wealth of minority shareholders,” Chandra said in a statement after the press conference.
“In view of the above, I have decided not to continue working with SEBI on a personal basis. They command no respect from me. I urge Zee Entertainment to also stop working with SEBI; as it is a biased investigation; with a preconceived mindset of the SEBI Chairman,” Chandra added.
