Zee Fights Market Ban to Fund Daily Operations

Zee Entertainment Enterprises Ltd is seeking relief from a market-access ban imposed by the Securities and Exchange Board of India (Sebi). The company has approached the Securities Appellate Tribunal (SAT), arguing that it requires access to sell roughly ₹1,200 crore in liquid mutual fund investments. These funds are essential for covering immediate operational needs, such as film production, payroll, and payments to creditors.

Sebi's ban, issued on July 31, restricts Zee from accessing the securities market for two months, while also penalizing CEO Punit Goenka and promoter Subhash Chandra. The tribunal questioned the logic of preventing Zee from raising necessary funds, especially if the transactions are permissible post-ban. Goenka's counsel also highlighted that the ban has negatively impacted the company's share price, potentially devaluing its fundraising efforts.

Sebi's opposition stems from allegations that Zee's promoters misused the listed company's properties as collateral for loans taken by private entities. The regulator claims these transactions, including the alleged unauthorized pledging of a Hyderabad property in December 2018, occurred without proper approvals or disclosures to shareholders. The tribunal has reserved its order after hearing both sides, requesting Sebi to file a reply within six weeks.