Essel Group Chairman Dr. Subhash Chandra has said he will not cooperate with SEBI and intends to challenge SEBI Chairperson Madhabi Puri Buch in court. Speaking to the media on September 2, Chandra stated, “I am not going to cooperate. I am rather going to approach the court against her and seek her removal from the position at the earliest possible.”

In a press conference, Chandra accused the SEBI Chairperson of being “one of the negative forces” working against the media company and cited her as a major reason behind the failure of the proposed ZEE-Sony merger.

Dr. Chandra shared the series of events with reporters and said that on 25th January 2019 when ZEE shares plunged by 33 per cent and they could not pay the margin call, he issued an open letter in the interest of the public at large. The letter alluded to the fact that - all operating companies of the Group were performing exceptionally well and were under no stress whatsoever. 

The letter also explained the reasons for increased debt exposure at the Group level. The letter further stated that from May / June 2018, negative forces have been acting against the Group. “We wrote a number of complaints to SEBI, other concerned authorities to investigate, however all our efforts did not result in any action.  In this letter, I urged the lenders to maintain patience and assured them that I will positively be able to pay the lenders dues; once the process of ZEE stake sale is complete,” said Chandra. 

He also shared that he was approached by a person named Manjit Singh on 17 February, 2024, through the reference of a known person to resolve the issue at SEBI. “I generally avoid such meetings, but I did meet him since he had a reference of a known person. The said person promised that the work will be done through Madhabi Puri Buch and her husband and all issues of SEBI will be resolved for a price. I did not believe the same but he said that “Since you have resolved debt repayments of more than Rs. 30,000 crore, a three-digit payment won’t hurt you”. I did not still believe the same.”

He further added, “However, on looking at the latest Hindenburg and ICICI bank revelations against Madhabi Puri Buch and her connected persons, it seems that the person who approached me may have been right.” “Maybe this was the modus operandi in various cases, which have got settled/adjudicated through compounding with light touch.”

ln August last year, days after the NCLT (National Company Law Tribunal) approved the Zee-Sony merger, SEBI (Securities and Exchange Board of India) issued an order barring Zee promoters Punit Goenka and Subhash Chandra from holding significant management roles within Zee companies or the newly merged entity with Sony. SEBI's investigation into the matter is set to be completed within eight months.

The SEBI order, dated August 14, not only addresses regulatory concerns but also acknowledges the NCLT's August 10 approval of the Zee-Sony merger. The order emphasises that Punit Goenka, who was poised to assume the role of Managing Director post-merger, would hold significant managerial responsibilities.

According to the order, both Subhash Chandra and Punit Goenka were prohibited from holding positions as directors or Key Management Personnel (KMP) in Zee Entertainment Enterprises Ltd, Zee Media Corporation Ltd, Zee Studios Ltd (a wholly-owned subsidiary of Zee Entertainment Enterprises Ltd), Zee Akaash News Pvt Ltd (a wholly-owned subsidiary of Zee Media Corporation Ltd), and any resultant companies formed through mergers, amalgamations, or demergers involving these entities.

"A detailed investigation in the matter is in progress which may bring out additional acts of omission or commission by the entities (Goenka-Chandra), if any, depending on the material and after considering the facts and veracity of their submissions. The findings in the extant order are prima facie findings in a matter under investigation," stated the 91-page order authored by SEBI Chairperson Madhabi Puri Buch.