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Essel Group’s logo (Source: Wikipedia)
The Enforcement Directorate (ED) initiated a search operation at an Essel Group premises in Mumbai on Wednesday, according to a report by ET Now. While the focus of the raid is reportedly the Essel Group continental office, the news comes amid investigations by the Securities and Exchange Board of India (Sebi) of subsidiary Zee Entertainment.
Essel Group and Zee Entertainment have been under scrutiny by the market regulator following Sony Group Corp’s recent decision to terminate a merger agreement with Zee. Discussion for the merger, valued at $10 billion, had been ongoing and faced significant delays for nearly two years. It fell through when Sony backed out on Monday.
Zee Entertainment Enterprises Ltd (ZEEL), with over 50 channels operating in 11 language clusters and a weekly viewership base of 572 million in the domestic market, moved the National Company Law Tribunal (NCLT) and the Singapore International Arbitration Centre (SIAC) against Sony Pictures Network India’s termination of the merger deal on Wednesday.
Prior to Sony Group’s decision, Zee Group founder Subhash Chandra had also written to Finance Minister Nirmala Sitharaman, accusing Sebi of attempting to obstruct the merger and subsequent investment, according to a report by news agency PTI. Chandra alleged that Sebi, with a “predetermined mind,” was jeopardising the merger of Zee Entertainment Enterprise with Sony Group. He requested the finance minister’s intervention to safeguard the interests of minority shareholders of ZEEL.
In his letter dated January 16, Chandra expressed concerns over Sebi’s actions and cooperation in the investigation related to alleged fund diversion by promoters. The Zee group patriarch also raised objections to a new notice issued by Sebi to former directors of ZEEL.
First Published: Jan 25 2024 | 10:02 AM IST
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