Subhash Chandra alleges SEBI chief blocked Sony-ZEEL merger

New Delhi: Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises (ZEEL), has accused SEBI Chairperson Madhabi Puri Buch of obstructing the Sony-ZEEL merger. 

"SEBI Chairperson was the main reason for the merger to set apart, and that is why I am questioning today that SEBI is supposed to protect the interests of minority shareholders, and she succeeded in pushing away Sony from getting merged with Zee," he alleged during a press conference on September 2, 2024.

Chandra said that Buch is "corrupt" and "vindictive," alleging that SEBI was the "main reason" for Zee’s merger with Sony to collapse.

Chandra, who is facing accusations of siphoning Rs 200 crore from Zee, is now planning to take legal action against the ongoing SEBI investigation.

He also alleged that Buch is "biased" against him and he has taken a decision "not to cooperate with SEBI any further".

Both Chandra and Punit Goenka challenged the SEBI directive before the Securities Appellate Tribunal (SAT), which stayed the order.

Chandra's allegations against Buch come after claims from the Indian opposition party Congress that Buch holds a paid position at ICICI Bank and has received $2 million in benefits from the bank and its subsidiaries.

Chandra told journalists, "ICICI Bank and my investigation tells me that Madhabi Puri Buch and Chanda Kochhar at that time, were constantly on phone calls," he said, adding, "She was the very close person, and Chanda Kochhar was the one who was giving the money to her, which has been revealed today this morning, for crores of rupees she was taking illegally from ICICI.”

In December 2021, Zee and Sony agreed to merge, but the deal encountered regulatory hurdles due to a SEBI investigation. 

Chandra's son, Punit Goenka, who was Zee's MD and CEO, was barred by SEBI from holding any position in the company. Although this ban was later overturned, Sony continued to push for his removal, which further derailed the merger.

Chandra also spoke of a conversation with Manjeet Singh, a name he repeatedly referenced during the press conference without revealing the person's identity, claiming Singh suggested resolving the matter with a 'three-digit' payment, implying possible bribery. Chandra insisted he is prepared to present evidence to back up his allegations against the SEBI Chairperson.

He said, “I was approached by a person named Manjit Singh on February 17, 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 would be done through Madhabi Puri Buch and her husband and that all issues of SEBI would be resolved for a price. I did not believe the same but he said, “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.”

Chandra 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 gotten settled through compounding with a light touch.”

Chandra also said that, as per him, Buch is corrupt. “Since she and her husband, whose combined income was around rupees one crore per annum before she assumed the position at SEBI, have now gone up to Rs 40-50 crore per annum,” he said.

During the press conference, he also urged ZEEL to “stop cooperating with SEBI any further, since it is a biased investigation being carried out with a preconceived mindset of SEBI Chairperson.” 

Chandra also claimed that he wrote to Finance Minister Nirmala Sitharaman regarding the matter but has not received a response.

The Securities and Exchange Board of India (SEBI) did not offer any comment immediately. However, a source familiar with the matter said that the allegations are malicious.