Variety: Zee Group’s Subhash Chandra Accuses Indian Regulatory Chief of Sinking Company’s Merger With Sony

Story from Variety:

Subhash Chandra, chairman emeritus of Indian media giant Zee Entertainment Enterprises Ltd (ZEEL), has accused Madhabi Puri Buch, chair of regulator Securities and Exchange Board (SEBI) of scuppering the Sony-ZEEL merger.

In a press conference on Monday, Chandra alleged that Buch is “corrupt” and “vindictive” and that Zee’s issues with SEBI was the “main reason” that the merger fell apart.

In June 2023, SEBI barred ZEEL MD-CEO Punit Goenka and Chandra from holding any managerial or directorial positions in listed companies. The suspension was while SEBI carried out investigations into allegations of insider trading. The SEBI notice made multiple reference to “siphoning” of funds. India’s Securities and Appellate Tribunal (SAT) set aside the SEBI order in November. “They set aside everything. If you read the order, they are stopped short of saying that there is total prejudice against this group,” Chandra said on Monday.

The merger was called off in January this year. In February, a Bloomberg report alleged that SEBI had found a discrepancy of some $241 million in ZEEL’s accounts and that the company founders were being called in for questioning. “Reports and rumours pertaining to accounting issues in the company are incorrect and false,” was ZEEL’s response at the time.

On Monday, Chandra said that during the time the merger was still in progress, he wrote to India’s finance minister Nirmala Sitharaman: “I have told her that Madhabi Puri Buch is acting against the Zee-Sony merger, clearly, in so many words, but [got] no response.”

Chandra is now planning 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 may get me investigated by anybody, any third party, any independent,” Chandra said.

Chandra’s allegations against Buch follow accusations made by Indian opposition party Congress 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 been acting in the interest of investors of ZEE Entertainment. The ZEE Sony merger was progressing well and they had got SEBI/ Stock exchange approval. Despite the same, SEBI instructed BSE/NSE [Bombay Stock Exchange/National Stock Exchange] to intervene in NCLT [National Company Law Tribunal] proceedings and scuttle the merger by spooking Sony. Ultimately, the merger was terminated by Sony which resulted in the erosion of huge wealth of minority shareholders,” Chandra said in a statement following the press conference.

“In view of the above, I have taken a decision not to co-operate with SEBI any further in my personal capacity. They do not command any respect from me. I urge Zee Entertainment to also stop co-operating with SEBI any further; since it is a biased investigation being carried out; with a pre-conceived mindset of the SEBI chairperson,” Chandra added.