Tag: Subhash Chandra

Zee sets up independent advisory panel amid ‘negative public opinion’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Zee Entertainment Enterprises Ltd has formed an independent advisory committee to look into the alleged “widespread circulation of misinformation, market rumours, and speculation” leading to negative ‘public opinion’ about the company.

The committee will be headed by former Allahabad High Court Judge Satish Chandra and will comprise Uttam Prakash Agarwal and PVR Murthy, the independent directors of the company, Zee said in a stock exchange filing on Friday.

“We hereby inform you that while taking cognizance of widespread circulation of misinformation, market rumours, and speculation that has led to the formation of negative public opinion about the company and consequent erosion of investor wealth, the Board of Directors of the company has constituted an Independent Advisory Committee headed by Dr. Satish Chandra, retired Judge of the High Court of Allahabad, who shall be the Chairperson of the Committee, and two members of the Board, i.e. Uttam Agarwal and Dr P V Ramana Murthy, Independent Directors of the company,” it stated.

Justice Chandra retired from the Allahabad High Court in 2015 after serving as a judge for seven years. As per the High Court’s official website, he enrolled as an Advocate in the Bar Council of Uttar Pradesh in 1975 and specialises in Constitutional Law, International Law, and Taxation Law.

This comes as the stock of the Subhash Chandra-founded company declined by around 40% since the start of the year.

In connection with the fund diversion case, the Securities and Exchange Board of India (SEBI) might issue a show cause notice to the company next month, NDTV Profit reported.

After a few media reports recently alleged a ₹2,000 crore or $240 million ‘accounting hole,’ Zee called it incorrect and false.

“Reports and rumours about accounting issues in the company are incorrect and false. We are in the process of providing all comments requested by SEBI and have extended complete cooperation on all aspects,” Reuters quoted Zee as saying earlier this week.

On January 22, Zee and Sony’s $10-billion merger was officially called off. Shares of Zee closed at over 3% high on Friday at ₹173.45 a piece.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zee Vs Sony: Emergency arbitration in Singapore, hearing today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hearing for an emergency arbitration in the Zee Entertainment-Sony merger will take place in Singapore on January 31, sources with knowledge of the matter told CNBC-TV18.

The Singapore International Arbitration Center is the first Asian arbitration institution to offer this process and has received over 130 applications since 2010 for the appointment of an Emergency Arbitrator.

In case the application for emergency interim relief is accepted, an Emergency Arbitrator will be appointed within a day.

Sony has initiated arbitration proceedings for an alleged breach of terms by Zee Entertainment. In response, Zee has initiated legal action to contest Culver Max and BEPL’s claims at the Singapore International Arbitration Centre.

Zee Entertainment has called Sony’s demand for $90 million in termination fees legally untenable and has also denied the breach of the merger agreement in response to Sony.

Earlier, a Reuters report indicated that Sony had scrapped the proposed $10 billion merger with Zee after the latter failed to meet certain financial terms of the deal and come up with a plan to address them.

Zee has denied the allegations in a letter to Sony, also reviewed by Reuters, and accused the Japanese company of “bad faith” in calling off the merger.

On January 29, Zee promoter Subhash Chandra told Mint in an interview that the company’s promoters plan on taking their stake back up to 26% from the current 4%.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zee promoters plan to increase stake to 26%, asks investors to have ‘patience’: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Subhash Chandra, promoter of Zee Entertainment Enterprises Ltd., plans on increasing the promoter stake in the company back to 26% from the current 4% levels. He said this in an interview with Mint. He added that he does not plan on raising any debt by raising funds from outside.

“It will take time (stake increase). We will need a lot of money. But we are clear that we are not going to raise funds from the outside. We don’t want debt. It’s not going to be overnight, but that’s the intent,” the Mint interview quoted Chandra as saying.

Zee Entertainment has been in focus after its proposed $10 billion merger with Sony was terminated earlier this month, leading to a sharp sell-off in the stock. Shares fell over 30% in a single day, its biggest drop on record.

CNBC-TV18 also accessed a letter that Chandra had written to Finance Minister Nirmala Sitharaman, seeking her intervention in the deal. The letter was written on January 16, six days before Sony pulled the plug on the deal. The letter highlighted how he repaid nearly 92% of the outstanding debt, by selling a stake, which took the promoter’s shareholding down to 4% from 40% earlier.

In response, Zee has now approached the National Company Law Tribunal (NCLT), seeking further directions on implementing the merger. The company has also termed Sony’s $90 million termination fee demand as legally untenable.

One of the points of contention for the merger to go through was the fact that Sony did not want Punit Goenka to lead the merged entity. Chandra said that Punit Goenka was ready to step aside, but the merger was still called off.

“The question for the shareholders is if you think Punit can’t run the business, who can? So if shareholders think that Sony would agree to the merger if Punit stepped aside, it is ill-founded,” the interview quoted Chandra as saying.

Chandra also urged Zee’s shareholders to have patience in the interview, adding that Punit Goenka is the right person to lead the “profitable, zero-debt” company.

Zee Entertainment’s shares are out of the F&O ban. The stock is down 40% over the last month and has halved over five years.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zee promoter Subhash Chandra wrote to FM before Sony merger termination: CNBC-TV18 accesses letter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Zee Entertainment’s promoter Subhash Chandra wrote to Finance Minister Nirmala Sitharaman last week on January 16, a week before its $10 billion merger with Sony Pictures was terminated. The letter, accessed by CNBC-TV18 sought the Finance Minister’s intervention to “safeguard the interest of Zee Entertainment’s minority shareholders.”

The letter alleges that efforts are ongoing to scuttle the merger with Sony. Chandra wrote in his letter that he is not concerned about the probe by market regulator SEBI but with the timing of the new notice.

“I am not suggesting that SEBI should not investigate if they have doubts of any kind,” the letter stated, adding that the new notice does not contain any point which is not already part of the company’s records, which have already been provided to SEBI.

“That said, if the mentioned parties continue to influence the investigation, especially by SEBI, it will lead to a huge financial loss for minority shareholders of ZEE,” Chandra wrote in his letter.

Zee Entertainment’s shares fell 30% on Tuesday, marking its biggest single-day fall on record, leading to a market capitalisation erosion of over ₹7,000 crore. The fall came after Sony Pictures terminated the merger on Monday, which was in the works for over two years. It has also sought $90 million from Zee as termination fees.

The termination of the merger also prompted multiple downgrades from analysts, who cut their price targets on Zee’s stock by as much as 50%.

“SEBI has been acting with a predetermined mind, which is evident in the order passed by the appellant court, Justice Tarun Agarwalla, on October 30, 2023,” the letter read.

The Securities Appellate Tribunal (SAT) had overturned SEBI’s order which had barred both Subhash Chandra and Punit Goenka from holding any key managerial positions in Zee Entertainment, till investigations were completed.

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Post the overturning of the order, Punit Goenka was reinstated as Zee’s MD & CEO.

The letter alleged that the notice being issued at this stage appears to be an “exercise to sensationalise the matter through media platforms.” Chandra also highlights that he expressed similar concerns in a letter written to the market regulator in November 2018, over “negative forces impacting the valuation of Zee.”

Chandra’s letter further states that he has made efforts with all the lenders and repaid nearly 92% of his debt to the tune of ₹40,000 crore.

As a result of the multiple stake sales undertaken by Zee’s promoters, their stake in the company is down to 4% from around 40% earlier.

On Tuesday, sources told CNBC-TV18 that the market regulator is in the final stages of its investigation against Punit Goenka and Subhash Chandra and their role at Zee.

SEBI has been investigating charges around fund siphoning and window dressing of books of accounts which allegedly benefited the promoter family of Zee Entertainment.

As per sources, in the first phase of its investigation, SEBI found misuse of funds to the tune of ₹200 crore from Zee Entertainment, benefiting the promoter family. However, now, according to sources, the size of the violation has escalated to around ₹800-1,000 crore.

Zee Entertainment’s shares will be in focus today as well as the stock has exited the F&O ban, which means that new positions can be created in the stock.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sony agrees to discuss extending December 21 deadline for merger, says ZEEL

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Zee Entertainment Enterprises Ltd on Wednesday (December 20) said Culver Max Entertainment, formerly known as Sony Pictures Networks India, has agreed to discuss extending the date required to make their merger scheme effective, a day ahead of the deadline.

A day after Sony Pictures Networks India (SPNI) stated that it has not yet agreed to a deadline extension requested by Zee Entertainment Enterprises Ltd (ZEEL) for their proposed $10-billion merger, the Subhash Chandra family-promoted media firm said it has received a communication from Sony group for discussing an extension of the deal which was announced almost two years ago.

“The Company is now in receipt of a communication from CMEPL (Culver Max Entertainment Pvt Ltd) and Bangla Entertainment Pvt Ltd BEPL that they will enter into good faith negotiations as required under the Merger Cooperation Agreement (MCA) entered amongst the Parties, the Company, CMEPL and BEPL, with a view to discuss the extension of the date required to make the Scheme effective by a reasonable period of time,” ZEEL said in a regulatory filing.

On Tuesday, SPNI said it has not yet agreed to a deadline extension requested by ZEEL for their merger and was looking forward to knowing how the latter planned to complete the remaining critical closing conditions.

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In a statement, SPNI said ZEE’s notice to the BSE and the National Stock Exchange of India dated December 17, seeking an extension of the merger deadline is “an acknowledgment that they will not be able to meet the December 21, 2023, deadline to close the SPNI/ZEE merger”.

The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline, it added.

“SPNI is required to start those conversations but has not yet agreed to a deadline extension,” the company said. It further said, “We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions.”

Earlier on December 17, ZEEL in a regulatory update said it sought an extension in the December 21, 2023, deadline of its proposed merger with Culver Max Entertainment (CMEPL).

ZEEL had approached Culver Max and Bangla Entertainment Pvt Ltd (BEPL) for an extension in the deadline to complete the proposed merger, which will create India’s biggest media conglomerate, according to regulatory updates.

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CMEPL is an indirect wholly-owned subsidiary of Sony Group Corporation (SGC). BEPL is also an indirect wholly-owned subsidiary of SGC and a part of the SGC Group.

The proposed $10-billion merger of ZEEL, BEPL, and CMEPL has received regulatory approvals from the fair trade regulator CCI, bourses NSE and BSE, shareholders and creditors of the company. In August this year, the Mumbai bench of the National Company Law Tribunal (NCLT) also gave a go-ahead to the merger of ZEEL and Culver Max Entertainment.

As per the agreements, ZEEL MD & CEO Punit Goenka has to lead the merger entity. However, according to some reports, now CMEPL is insisting on making way for its Sony Pictures Network head N P Singh.

This followed an interim order by Sebi barring Essel Group chairman Subhash Chandra and Zee Entertainment Enterprises Ltd MD and CEO Punit Goenka from holding the position of a director or key managerial personnel in any listed company.

The market regulator took action after they were found diverting funds from the company. Chandra and Goenka moved the Securities Appellate Tribunal (SAT) challenging the Sebi interim order. In October, SAT quashed the Sebi interim order.

Earlier in September 2021, then Sony Pictures Networks India and ZEEL entered into a non-binding term sheet to bring together their linear networks, digital assets, production operations, and programme libraries.

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The combined entity will own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.

Subsequently, the two parties signed a definitive agreement for their merger in December 2022. As per the agreement, ZEEL’s chief executive Punit Goenka was to lead the combined company as its Managing Director & CEO.

The majority of the board of directors of the combined entity would be nominated by the Sony Group and include the current SPNI Managing Director and CEO N P Singh. However, questions over the future of the merger arose after Sebi’s actions against Chandra and Goenka for siphoning off funds of ZEEL.

The proposed merger has already been approved by the shareholders of ZEEL and sectoral regulators including the Competition Commission of India.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

LIC Housing Finance takes possession of Mumbai property whose guarantor is Essel Group’s Subhash Chandra

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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LIC Housing Finance has taken symbolic possession of a property in Churchage, Mumbai, whose guarantor was media mogul Subhash Chandra, for non-payment of dues.

In a newspaper advertisement published on Saturday, September 30, LIC Housing Finance said it has issued a demand notice calling upon Vasant Sagar Properties, as well as PAN India Infraprojects and the guarantor Chandra to repay the aggregate amount of over Rs 570 crore within two months from the date of receipt of the notice.

LIC Housing Finance said the guarantors and borrowers had failed to repay the amount and so it took symbolic possession of the assets on September 28, under the SARFESI Act.

LIC Housing Finance said the borrowers/guaranters and the public are cautioned “not to deal with the properties and any dealings with the properties will be subject to the charge of LIC Housing Finance for an amount of Rs 570,50,43,723.11, and interest and ither charges, etc, thereon,” the newspaper advertisement stated.

The property mentioned is a plot located in the Backbay Reclamation Estate in Churchgate, Mumbai.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Subhash Chandra-led Essel Group reaches settlement with JC Flowers ARC; to repay Rs 1,500 crore over 7 months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a significant development, Subhash Chandra-led Essel Group companies have come to an agreement to settle their debt with JC Flowers Asset Reconstruction Company (ARC), two people aware of the matter told CNBC-TV18.

The deal relates to Essel Group’s debt amounting to around Rs 6,500 crore, which JC Flowers ARC had acquired from Yes Bank at a discounted rate as part of the lender’s transfer of a Rs 48,000 crore Non Performing Assets (NPA) portfolio to the ARC for a little over Rs 11,183 crore in December 2022.

Zee Learn, a part of the Essel Group, had earlier signaled its intention to resolve matters with JC Flowers ARC by disclosing its plans to the exchanges on August 8.

It had said, “Zee Learn Limited has signed settlement agreement with JC Flowers Asset Reconstruction Private Limited on August 7, 2023 to settle its obligations with respect to loans borrowed by certain trusts and entities. Till the time the loans are settled in terms thereof and legal proceedings initiated in connection therewith are either settled/withdrawn, the matters covered under the legal proceedings remain sub judice.”

The company had not disclosed the terms of the settlement.

CNBC-TV18 has learnt that as part of the agreement, Essel Group entities have committed to repaying Rs 1,500 crore within a span of seven months to JC Flowers. The terms of the settlement dictate that 15 percent of this amount would be repaid within the first 30 days, with the remaining 85 percent to be paid over the following six months, the sources said.

In a possible move to aid this repayment, JC Flowers ARC might consider releasing some of the security it holds, which includes real estate assets and shares of certain Essel Group companies such as Zee Learn, in proportion to the repayment schedule, said one of the people quoted earlier.

However, the person added that JC Flowers ARC will retain its 25 percent stake in Dish TV till the entire agreed amount is repaid by the Essel Group companies. The ARC had acquired this stake from Yes Bank when the debt was transferred to them.

Following this transfer, Yes Bank no longer holds any exposure to the Essel Group companies, retaining only security receipts (SRs) as part of the 15:85 arrangement during the transfer of the portfolio from Yes Bank to JC Flowers ARC.

The recovery for JC Flowers ARC also could not be ascertained as the ARC had bought the debt from Yes Bank at a “significant discount.”

JC Flowers ARC declined comment on CNBC-TV18’s report.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Former Zee chief Punit Goenka moves SAT against SEBI order on corporate roles amid fund allegations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Punit Goenka, the former chief of Zee Entertainment Enterprises Ltd, on Friday, moved the Securities Appellate Tribunal (SAT) seeking a stay on the Securities and Exchange Board of India’s (SEBI) order barring him from holding key positions within four Zee group firms and in the merged entity of ZEEL and Sony Pictures Networks India.

The SAT will hear the matter next week on August 30.

The SEBI order has alleged that Goenka and his father Subhash Chandra, former chairman of Zee Entertainment Enterprises Ltd (ZEEL), abused their roles as directors and Key Managerial Personnel (KMPs) of a listed company by siphoning off funds for their own benefit.

While the Zee Group has declined to comment on CNBC-TV18’s query, sources say the duo may seek KMP positions until SEBI completes its probe into their merger. Goenka is likely to question how can he be kept out of office until the probe is completed, which SEBI said could take eight months.

Notably, Chandra has not moved the SAT.

Goenka’s move to challenge SEBI’s confirmatory order comes in response to their decision made on August 14, wherein they prohibited the duo from holding positions as directors or KMPs in at least four Zee group companies as well as in the merged entity of ZEEL and Sony Pictures Networks India, until further directions from the regulator.

KMPs include several high-level corporate roles such as CEO, Managing Director, Company Secretary, Whole-time Director and CFO.

The focus of Goenka’s challenge includes his restriction from becoming the managing director of the merged entity, a deal that is yet to be completed.

SEBI Chairperson Madhabi Puri Buch, while confirming the order, stressed that the investigation into the alleged fund diversion case “shall be completed in a time-bound manner and in any event, within a period of eight months”.

It’s worth noting that an interim order passed in June had initially barred Chandra and Goenka from directorial or KMP roles in any listed company. This directive has now been modified. The two individuals had contested the interim order before SAT, which had previously rejected their pleas.

Adding to the complexity of the situation, the National Company Law Tribunal (NCLT) approved the merger of ZEEL and Culver Max Entertainment (operating as Sony Pictures Networks India) on August 10.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Zee-Sony case: Punit Goenka, Subhash Chandra may move SAT against SEBI’s order and seek top roles

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As Zee and Sony merger received an approval from the National Company Law Tribunal (NCLT), Punit Goenka and Subhash Chandra are likely to approach the Securities Appellate Tribunal (SAT) against the market regulator’s order barring them from holding key managerial positions in the merged company, sources told CNBC-TV18 on August 16.

ZEEL promoter Goenka and Essel Group promoter Chandra may seek KMP position till the Securities and Exchange Board of India (SEBI) completes its probe against the two, sources said.

They added that Goenka may argue how he can be kept out of office till SEBI concludes the investigation.

Zee Group has declined to comment on CNBC-TV18’s query.

The development comes two days after SEBI modified its order against Chandra and Goenka and barred them from holding the post of director or key managerial personnel in at least four Zee group companies as well as in the merged entity of ZEEL and Sony Pictures Networks India till further directions.

Sebi Chairperson Madhabi Puri Buch on August 14 said the investigation in the case of alleged siphoning off funds of ZEEL “shall be completed in a time-bound manner and in any event, within a period of eight months from the date of this order.”

In the interim order passed earlier in June, Chandra and Goenka were barred from becoming a director or key managerial personnel (KMP) in any listed company but that direction has been modified as aforementioned.

In the 91-page order, Buch said the interim order was modified after considering the material on record, oral and written submissions of the entities.

Till further directions, Chandra and Goenka have been barred from holding the post of director or KMP in ZEEL, Zee Media Corporation Ltd. Zee Studios Ltd (a wholly-owned subsidiary of ZEEL), Zee Akaash News Pvt Ltd. (a wholly-owned subsidiary of Zee Media Corporation Ltd).

Besides, they have been restrained from holding the positions in any resultant company that is formed pursuant to a merger or amalgamation of the above named companies with any other company, wholly or in part.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SEBI modifies order against Subhash Chandra, Punit Goenka; says probe to be completed in 8 months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Sebi on Monday (August 14) modified its order against Subhash Chandra and Punit Goenka, and barred them from holding the post of director or key managerial personnel in at least four Zee group companies as well as in the merged entity of ZEEL and Sony Pictures Networks India till further directions.

Besides, Goenka has been restrained from becoming the Managing Director at the merged entity of Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India, now known as Culver Max Entertainment. The deal is yet to be complete.

Passing the confirmatory order in connection with the case of alleged siphoning off funds of ZEEL, Sebi Chairperson Madhabi Puri Buch said the investigation by the watchdog in the case “shall be completed in a time-bound manner and in any event, within a period of eight months from the date of this order.”

In the interim order passed in June this year, Chandra and Goenka were barred from becoming a director or Key Managerial Personnel (KMP) in any listed company but that direction has been modified now.

The interim order was challenged by the two individuals before the Securities Appellate Tribunal (SAT), which had rejected their pleas.

In the 91-page order on Monday, Buch said the interim order is being modified after considering the material on record, oral and written submissions of the entities.

Till further directions, Chandra and Goenka have been barred from holding the post of director or KMP in ZEEL, Zee Media Corporation Ltd. Zee Studios Ltd (a wholly-owned subsidiary of ZEEL), Zee Akaash News Pvt Ltd. (a wholly-owned subsidiary of Zee Media Corporation Ltd).

Besides, they have been restrained from holding the positions in any resultant company that is formed pursuant to a merger or amalgamation of the above named companies with any other company, wholly or in part.

Also, they are barred from being a director or KMP in ”any company, which is formed pursuant to demerger of any of the above named companies”, the order said.

Sebi noted that post-merger, Goenka would be appointed as Managing Director of the merged company. The same means that he would be entrusted with substantial powers of management of the affairs of the merged company.

“That very role in ZEEL is under question and therefore, till the final outcome of the proceedings in the instant matter, it would be appropriate that he is not part of the management of ZEEL or any corporate avatar of it,” Buch said in the order.

“A detailed investigation in the matter is in progress which may bring out additional acts of omission or commission, of the entities, if any, in detail, 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,” she added.

The case pertains to Chandra and Goenka having abused their position as directors or KMPs of a listed company for siphoning off funds for their own benefit.

They alienated the assets of ZEEL and other listed companies of Essel Group for the benefit of associate entities, which are owned and controlled by them,  Sebi mentioned in the interim order.

On August 10, the National Company Law Tribunal (NCLT) approved the merger of ZEEL and Culver Max Entertainment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow