Zee refutes report of Rs 2,000 crore accounting ‘hole’, calls it ‘false’

Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday refuted the report which said that the Securities and Exchange Board of India (Sebi) has found that about Rs 2,000 crore may have been diverted from the company.

“Reports and rumours pertaining to accounting issues in co. are ‘incorrect and false’,” the company said as reported by news agency Reuters. “We are in the process of providing all comments requested by Sebi and has extended complete cooperation on all aspects.”

A report by Bloomberg on Wednesday said that the market regulator has found a “hole” of more than Rs 2,000 crore in the accounts of ZEEL. It is roughly ten times more than initially estimated by Sebi investigators.

In August last year, Sebi barred Zee founders — Subhash Chandra and his son Punit Goenka — from holding executive or director positions in any listed firm after finding that they had “abused their position” and siphoned off funds “for their own benefit.”

The case made Sony reluctant to let Goenka be at the helm of the $10 billion merged entity. Goenka refused to let go of the chief executive officer (CEO) post offered to him in the 2021 agreement, which ultimately led to the Japanese conglomerate calling off the merger in January.

Zee appealed Sebi’s order in a higher appellate authority and got a partial reprieve in October, which allowed Goenka to hold an executive position while the probe was underway. It has also been trying to assure the investors since the deal fell apart

A report by the Economic Times (ET) also suggested that Zee is re-engaging with Sony to see if the merger can be revived. Zee later denied it.

On Wednesday, the shares of Zee fell over 10 per cent on the news of the accounting issue uncovered by Sebi. As of 11 am, it was trading 10.36 per cent in the red at Rs 173 apiece on BSE.