New SEBI show-cause hits ZEEL amid ongoing MCA inspection

New Delhi: Zee Entertainment Enterprises (ZEEL) on Thursday disclosed that the Securities and Exchange Board of India (SEBI) issued a show-cause notice (SCN) to the company, a current key managerial personnel and a former director during the quarter ended September 30, 2025, even as a parallel inspection by the Ministry of Corporate Affairs (MCA) under Section 206(5) of the Companies Act continues. 

According to the statutory filing, the SCN alleges certain violations of SEBI regulations in relation to an alleged lien on a property in FY 2018–19. ZEEL said it has submitted a detailed reply to the regulator, based on legal advice, denying the allegations against the company. 

The company has also filed a settlement application, which is currently under consideration. The management has stated it does not expect any material adverse impact on the company with respect to these matters. 

The company further noted that the Board had constituted an Independent Investigation Committee (IIC) to review certain transactions with the company’s vendors and with one subsidiary that were the subject of regulatory queries. 

The IIC completed its review and placed its report before the Board, which, as recorded in the filing, “noted no material irregularities” and concluded that the transactions under review were in the normal course of business. 

ZEEL added that, based on a review of records of the company and its subsidiary, the transactions (including refunds) were against consideration for valid goods and services received from such vendors. 

The MCA’s inspection under Section 206(5) remains ongoing. ZEEL said it continues to cooperate with the authorities and that its import of records and explanations has been provided as required. 

The company reiterated that its import policies and business decisions are guided by regulatory compliance and internal controls, and that it remains confident about the robustness of its governance processes as reflected in the IIC’s findings. 

It added that it does not foresee a material impact from the regulatory proceedings on its financial position or operations, as disclosed to the exchanges.

The fresh SEBI show-cause notice (dated August 7, 2025) forms part of an ongoing investigation into ZEEL. 

In January 2025, SEBI withdrew an earlier SCN and said it would issue a new one consolidating prior allegations; the regulator also rejected settlement applications then and continued the probe.