MUMBAI: The market regulator Sebi has not only rejected the settlement offers filed by Zee Entertainment Enterprises (ZEEL) and its chief executive Punit Goenka but has said the regulator will conduct further investigation into both entities and Essel Group chairman Subhash Chandra.
In an adjudication order passed by Sebi on Thursday, a panel of whole-time members rejected the applications filed both for settlement and have instead referred the matter to Sebi for further investigation.
“Following the investigation, it has been decided "to proceed against the notices under section 11B of Sebi Act, 1992", Sebi said.
Under Sebi’s settlement proceedings regulations 2018, any entity against whom proceedings have been initiated or are to be initiated can apply to settle the proceedings by paying a fee and/or by complying with non-monetary terms without admitting to any wrongdoings.
According to the order, the regulator had issued a show-cause notice on July 6, 2022, to the three entities following allegations that they had violated provisions of the listing obligations and disclosure requirements (LODR) regulations.
Following this, ZEEL and Goenka filed applications to settle the adjudication proceedings. However, the whole time Sebi members rejected the applications and also referred the matter to Sebi for further investigation.
The January 2 order also said the earlier show-cause notices will be subsumed with the findings of the further investigation by the regulator.
"Accordingly, the content of the show-cause notices dated July 6, 2022, including the examination report, and all the relied upon documents will be treated as an integral part of the further investigation by Sebi," the order said, adding the contents of the July 6, 2022 show-cause notices to ZEEL, Chandra and Goenka will also be incorporated in the new show-cause notices to be issued following further investigations.
Separately, Goenka and ZEEL have been fighting Sebi for five years, after the regulator accused them of fund diversion. Following an appeal in the SAT, which gave an interim stay on the Sebi action, the matter is pending for final hearing.