Zee Entertainment said it believes SEBI's order has no direct impact on its ongoing fundraising exercise.
The company said it will continue with the required steps to complete the ₹3,143.5 crore preferential warrant issue.
Zee also said it is seeking legal advice and will take necessary measures to address the allegations mentioned in the regulator's order.
Zee Brushes Aside SEBI Order Concerns, Keeps ₹3,143.5 Cr Fundraising Plan Intact
The broadcaster said it will continue with the required steps to complete its ₹3,143.5 crore fundraising after receiving regulatory and shareholder approvals
Freepik
Summary
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Zee Entertainment Enterprises Ltd. (ZEEL) has said it believes the Securities and Exchange Board of India's (SEBI) recent order has no direct impact on its ongoing ₹3,143.5 crore fundraising exercise and that it will continue with the process.
The company said it has received SEBI's order and is currently seeking legal advice. It added that the fundraising exercise would proceed after receiving the necessary regulatory approvals from the stock exchanges and shareholder approval at the Extraordinary General Meeting (EGM) held on July 31.
"The Company firmly believes that the order from SEBI has no direct bearing on the fundraising exercise," a company spokesperson said.
Company Says Fundraising Will Continue
Zee said the proposed fundraising is aimed at strengthening its financial position while continuing to create long-term value for shareholders and other stakeholders.
According to the company, it will continue to complete the remaining formalities required for the preferential warrant issue, which received the required approvals in recent weeks.
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The company recently secured shareholder approval for a ₹3,143.5 crore preferential issue through the allotment of 24.95 crore warrants at ₹126 each. The proposal received 76.6% shareholder approval and, if completed, will increase the promoter group's stake in the company to 23.8%.
Company to Respond to SEBI Allegations
Zee also addressed the allegations referred to in SEBI's order and said it would take all necessary legal steps to protect the interests of stakeholders.
"With regard to the allegations levied against the Company and its Promoters, the required measures in accordance with the law will be taken to protect the interest of all stakeholders," the company spokesperson said.
SEBI's final order bars Zee Entertainment from accessing the securities market for two months, while promoters Punit Goenka and Subhash Chandra have been restrained from the securities market for 12 months each. The regulator has also imposed penalties of ₹30 lakh on Zee, ₹58 lakh on Goenka and ₹60 lakh on Chandra.
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The regulator's action relates to allegations that a Hyderabad property owned by Zee was used to secure borrowings worth ₹726 crore for four Essel Group entities without the approval of the company's Board or Audit Committee. SEBI has alleged violations of the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and the Listing Obligations and Disclosure Requirements (LODR) Regulations.