The Securities and Exchange Board of India (SEBI) has barred Zee Entertainment Enterprises (ZEEL), Managing Director and CEO Punit Goenka, and Founder-Chairman Emeritus Subhash Chandra over violations related to the unauthorised pledge of the company's Hyderabad land to secure loans for promoter-linked entities.
In its final order issued on Friday, the market regulator imposed cumulative penalties of Rs 1.48 crore on the three parties. Goenka and Chandra have been prohibited from accessing the securities market for one year, while ZEEL has been barred from the securities market for two months.
SEBI levied penalties of Rs 60 lakh on Chandra, Rs 58 lakh on Goenka and Rs 30 lakh on ZEEL.
The case pertains to a Deposit and Declaration (D&A) Agreement executed on December 27, 2018, under which the original title deeds of ZEEL's Hyderabad property were handed over to Indiabulls Housing Finance Ltd (IHFL) as collateral for loans availed by Essel Home and other promoter-linked Essel Group entities.
The investigation was initiated after irregularities involving missing title deeds of ZEEL's properties came to light. SEBI found that the company's Hyderabad land had been pledged without the knowledge or approval of its board of directors or audit committee.
According to the regulator, the arrangement was not disclosed to shareholders or investors, depriving them of material information regarding the company's assets.
SEBI held that the use of ZEEL's property constituted a related-party transaction and required prior approval from the audit committee under the Listing Obligations and Disclosure Requirements (LODR) Regulations. The company failed to obtain the necessary approvals, the regulator said.
Observing that the assets of a listed company are held in trust for all shareholders, SEBI said such assets cannot be deployed for the benefit of promoter-controlled entities without appropriate corporate approvals and governance safeguards.
The regulator concluded that the unauthorised encumbrance of ZEEL's property amounted to a fraudulent device that prejudiced investor interests and violated provisions of the SEBI Act as well as the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.
Responding to the order, ZEEL said it is seeking legal advice and may challenge SEBI's decision before the Securities Appellate Tribunal (SAT).
"The company is in receipt of the order issued by SEBI and is seeking advice from legal experts on the same. The company firmly believes that the order from SEBI has no direct bearing on the fundraising exercise," a ZEEL spokesperson said.
The company clarified that its proposed Rs 2,300-crore fundraising exercise would proceed as planned, noting that it has already received the required approvals from stock exchanges and shareholders.
"Following the regulatory approvals received from the stock exchanges and shareholders at the Extraordinary General Meeting held on July 31, 2026, the company will take all necessary steps to successfully complete the fund-raising exercise aimed at strengthening its financial foundation and creating long-term value for stakeholders," the spokesperson added.
ZEEL also said it would pursue appropriate legal remedies with regard to the allegations against the company and its promoters.
The latest order adds to a series of regulatory actions involving Zee Entertainment and its promoters in recent years, with SEBI examining allegations related to fund diversion, related-party transactions and corporate governance practices at the broadcaster.
