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This article is more than 2 month old.

SEBI chief declines to comment on Zee, says action will be taken in case of violations

Mini

Ajay Tyagi, the chairman of the Securities and Exchange Board of India (SEBI), on September 28, assured that the regulatory body will take action in case of any violation of norms. He, however, refused to make any specific comments on the recent events related to Zee Entertainment Enterprises.

SEBI chief declines to comment on Zee, says action will be taken in case of violations
Ajay Tyagi, the chairman of the Securities and Exchange Board of India (SEBI), on September 28, assured that the regulatory body will take action in case of any violation of norms. He, however, refused to make any case-specific comments when asked about the recent events related to Zee Entertainment Enterprises.
"It (the question) is a case-specific one but if there are any violations of any SEBI regulations, definitely whatever actions are required that will be taken," he told reporters.
SEBI’s chairman’s remark comes after Zee Entertainment signed a merger deal with Sony Pictures Networks India Private Limited last week. The firms have entered a non-binding term sheet that offers them 90 days to conduct due diligence and finalise the definitive agreements to combine their linear networks, digital assets, production operations and programme libraries.
According to the proposed transaction, both entities plan to list the merged entity where Punit Goenka will continue as the managing director and chief executive officer.
However, Zee is witnessing a rift between its largest shareholder Invesco Developing Markets Fund, and the original promoters over Goenka’s position.
Invesco had called an Extraordinary General Meeting (EGM) to remove Zee's long-time chief executive and managing director Goenka and two independent directors Manish Chokhani and Ashok Kurien. However, the announcement of the merger and Goenka’s position in the merged entity was made before the EGM could take place.
On September 27, Zee said it will take "necessary action as per applicable law" amid demand for the ouster of managing director Punit Goenka by two institutional investors—Invesco Developing Markets Fund and OFI Global China Fund LLC. The two together hold a 17.88 percent stake in ZEEL.
Under the merger plan, Zee will hold a 47.07 percent stake in the merged entity whereas Sony will hold the remaining 52.93 percent.
In a letter to Zee on September 26, Invesco red-flagged the September 22 merger announcement and said it is “symptomatic of the erratic manner in which important and serious decisions have been handled at the company.”
“We trust that the current board of directors of the Company will adhere to its fiduciary duties and not violate its statutory obligations to convene the EGM as requisitioned by Invesco,” Invesco wrote in the letter.
Meanwhile, earlier in the day, SEBI's board approved a slew of reforms, including frameworks for gold and social stock exchanges. Besides, the markets regulator has decided to relax eligibility requirements related to shares having superior voting rights.
--with PTI inputs
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