SEBI rejects settlement offers by ZEEL, Punit Goenka, to issue fresh show cause notice

Markets regulator SEBI on Thursday said it will issue a fresh show cause notice to Zee Entertainment Enterprises Ltd (ZEEL) founder Subhash Chandra and his son Punit Goenka as it continues its investigation into alleged violations of listing norms.

The order by SEBI’s adjudicating officer stated that the contents of the earlier show cause notice (SCN) issued in July 2022 would be incorporated into the new notice.

ZEEL and its top management came under Sebi scrutiny for alleged non-compliance with disclosure norms under its Listing Obligations and Disclosure Requirements (LODR) Regulations.

While the company and Goenka sought to settle the adjudication proceedings through applications filed in 2022, SEBI’s panel of Whole Time Members rejected the settlement request and directed further investigation.

SEBI has decided to subsume the earlier findings into the broader scope of its investigation under Section 11B of the Sebi Act, 1992, which allows the regulator to issue directions and impose penalties in the interest of investors and the securities market.

"In this regard, it has been observed that subsequent to completion of investigation in the instant matter, it has been decided by the competent authority to proceed against the noticees under Section 11B of SEBI Act 1992," the order said.

Section 11B pertains to Sebi's powers to issue notices and impose penalties.

The order clarified that the investigation findings, examination report, and associated documents from the July 2022 SCN would be integral to the fresh SCN to be issued.