Troubles continue to mount for Zee Entertainment Enterprises Limited (ZEEL) after the cancellation of its merger with Sony’s India unit, after a probe by Securities Exchange Board of India (Sebi) has revealed that around 1000 crore have been siphoned from the deal, as opposed to the earlier figure of 200 crore, reported CNBC TV18.

Sony called off its merger with ZEEL on January 22 (Reuters)

The CNBC report claimed that the market regulator conducted its investigation into the irregularities of the now-failed merger between ZEEL and Sony, with the alleged amount being siphoned rising exponentially.

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During the first phase of the investigation, SEBI found misuse of funds to the tune of 200 crore from Zee Entertainment. Now, this amount has risen to 800- 1000, CNBC TV18 said quoting sources.

According to the report, on the basis of the recent investigation, SEBI is planning to send a show cause notice to Punit Goenka and Subhash Chandra. “SEBI is in the final stages of its investigation against Punit Goenka and Subhash Chandra and their role at Zee,” the report said.

SEBI said that it is close to zeroing in on the misappropriation of funds by ZEEL CEO Punit Goenka as key managerial personnel (KMP) in Essel group companies, and can also impose a penalty on him. The SEBI probe is likely to be over in the next 2-3 months, said the report.

This comes a day after Sony issued a termination notice to ZEEL, ending its $10 billion merger deal two years after announcing it.

Sony Group Corporation said in its statement, “SPNI, a wholly-owned subsidiary of Sony Group Corporation, today issued a notice terminating the definitive agreements entered into by SPNI and Zee Entertainment Enterprises Ltd (ZEEL) relating to the merger of ZEEL with and into SPNI, which was…announced on December 22, 2021.”

ZEEL shares plunge after merger termination

Zee Entertainment shares slipped 33 percent on Tuesday, becoming the top loser on BSE Sensex for the day. With the deep plunge in the share prices, the market value of the company fell by 7,285.53 crore to 14,974.50 crore on the BSE.

Shares of ZEEL tanked 32.73 per cent to close at 155.90 apiece on the BSE. On the NSE, the company’ shares plunged 30.47 per cent to settle at 160.90 per share. During the day, the scrip of ZEEL also touched its 52-week low of 152.50 apiece on both BSE and NSE.

Earlier, SEBI had alleged Punit Goenka and Subhash Chandra abused their positions as directors and KMP by siphoning funds and profits of the company, barring them from holding any positions in the four companies in the Zee Group.

(With inputs from PTI)

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