Subhash Chandra, the promoter of Zee Entertainment Enterprises Ltd (ZEEL), wrote to Finance Minister Nirmala Sitharaman on January 16 to intervene alleging SEBI of operating with a preconceived motive to sabotage the merger transaction in which Sony was set to invest $1.5 billion, media networks have reported.
According to the letter published on several news sites, Chandra informed FM that he also wrote to the chairperson of SEBI as well. The letter says: “I am not suggesting that SEBI should not investigate, if they have doubts of any kind. The company and all other people are cooperating in the investigation, even the department has also summoned an ex-director, questioning him for over 4 hours.”
In the letter, Chandra expressed concern about the timing of this new notice, and the urgency of the same since it matches with the merger completion timeline of ZEE and Culver Max.
He said that the new notice does not contain any point which is not already a part of the company's records that have already been provided to SEBI. The letter reads that SEBI has been acting with predetermined mind, which is evident in the order passed by the appellate court, Justice Tarun Agarwalla, the Presiding Officer of the Securities Appellate Tribunal (SAT) in an order dated 30th October 2023 stated as per that - The Chairperson committed a manifest error in confirming the ad interim order on the ground of presumptions, assumptions/preponderance of probability. The Supreme Court has categorically held in a catena of cases that foundational facts must be established first before a presumption is made.
According to the letter, Justice Tarun Agarwalla further emphasizes that - there is material to show that appellant has always been cooperating with SEBI and whatever information was sought was duly supplied. Further, he also states that - On one hand the Chairperson has based its finding on a preponderance of probability while on the other hand has refused to accept the evidence filed by the appellant and has rejected the same on the ground that the documents do not prove the genuineness of the transaction beyond a reasonable doubt. This contrary stand taken by the Chairperson is, in our opinion, arbitrary.
Chandra believed that issuing a notice to the former directors of ZEE at this stage, appears to be an exercise to sensationalize the matter through media platforms. “I had expressed my concerns earlier as well, in a letter to SEBI in November 2018 over negative forces impacting the valuation of ZEE, but my requests went unnoticed.”
He also said that as a promoter, he understands and values the relation between companies and its lenders, to grow the nation's economy. “I have personally taken consistent efforts to engage with all the lenders and have managed to repay approximately 92% of my debt to the tune of around Rs. 40,000 crore. I continue to take efforts to ensure that the lenders who suffered financial losses because of me, are repaid and their losses are compensated.”
