Subhash Chandra Alleges Sebi's Madhabi Puri Buch As ‘One Of The Negative Forces’

Essel Group Chairman Dr Subhash Chandra has stated he will not cooperate with Sebi and plans to take legal action against Sebi Chairperson, Madhabi Puri Buch. “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", said Chandra while speaking to the media on 2 September.

During a press conference, Dr Chandra accused Sebi Chairperson, Buch of being 'one of the negative forces' undermining the media company, citing her as a key factor behind the collapse of the proposed Zee-Sony merger.

Dr Chandra recounted events to reporters, explaining that on 25 January 2019, when Zee shares plummeted by 33 per cent and they were unable to meet the margin call, he issued an open letter addressing the public.

The letter emphasised that all of the Group's operating companies were performing exceptionally well and were not under any financial stress. It also outlined the reasons for the Group's increased debt exposure and mentioned that since May/June 2018, negative forces had been working against the Group.

Dr Chandra said, "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.”

He also revealed that on 17 February 2024, he was approached by an individual named Manjit Singh, who came through a referral from a known acquaintance, offering to resolve the issue with 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."

"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", he further added.

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

The Sebi order, dated 14 August addresses regulatory concerns while also acknowledging the NCLT's August 10 approval of the Zee-Sony merger. The order emphasises that Goenka, who was slated to become Managing Director after the merger would hold managerial responsibilities.

According to the order, both Chandra and Goenka were prohibited from serving as directors or Key Management Personnel (KMP) in Zee Entertainment Enterprises, Zee Media Corporation, Zee Studios (a wholly-owned subsidiary of Zee Entertainment Enterprises), Zee Akaash News (a wholly-owned subsidiary of Zee Media Corporation) and any companies formed as a result of 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.