Final Order in the matter of unauthorised pledge of immovable property of Zee Entertainment…

This is a final order by SEBI regarding the unauthorized pledge of Zee Entertainment Enterprises Ltd. (ZEEL) immovable property in Hyderabad to secure loans for entities allegedly controlled by its promoters. SEBI examined whether this action violated regulations on fraudulent trade practices, listing obligations, and disclosure requirements.

Zee Entertainment Enterprises Ltd. (ZEEL), Mr. Punit Goenka, and Mr. Subhash Chandra.

• SEBI investigated the deposit of ZEEL's title deeds for Hyderabad land (17,639.64 sq. meters) with Indiabulls Housing Finance Limited (IHFL) on December 27, 2018.
• The property was pledged as security for four loans aggregating to ₹726 crores taken by Essel Group entities.
• SEBI alleged that ZEEL did not obtain prior approval from its Audit Committee, Board of Directors, or shareholders for this transaction.
• SEBI alleged that ZEEL failed to disclose the creation of security, related-party nature of the transaction, and subsequent Delhi High Court litigation to stock exchanges as required by SEBI LODR Regulations.
• SEBI alleged that ZEEL failed to disclose the resulting contingent liability in its financial statements for FY 2018-19, FY 2019-20, and FY 2020-21.
• SEBI alleged that Mr. Punit Goenka, as MD/CEO, signed incorrect management representation letters and CEO-CFO certifications despite the undisclosed encumbrance and litigation.

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