Mumbai (India), 14th April 2023: Zee Entertainment Enterprises Ltd.’s managing director and chief executive, Punit Goenka, has paid 50.7 lakh to the Securities and Exchange Board of India to resolve an insider trading complaint, the media entertainment business announced on Thursday.
Following the September 2020 debut of the rent-a-movie service ZEEPLEX, the capital market regulator filed an order in August 2021 against entities for engaging in insider trading activities in the shares of Zee Entertainment.
Sebi discovered throughout its investigation that some information that met the criteria for Unpublished Price Sensitive Information (UPSI) was not regarded as such by ZEEL.
Pay-per-view service ZEEPLEX, a “new content consumption medium for consumers and film distribution model,” was introduced by the company in 2020.
According to Sebi’s examination, the company’s announcement of the introduction of ZEEPLEX in the midst of Covid limitations qualified as “expansion of business” and was a consequently positive development.
According to the Prohibition of Insider Trading (PIT) Regulations, 2015, the MD, CEO, and those in similar positions in publicly traded businesses are required to set up a sufficient and effective system of internal controls to prevent insider trading and guarantee compliance with the rules.
The regulator discovered that Goenka, who served as MD and CEO during the introduction of ZEEPLEX, did not set up sufficient internal procedures to recognise UPSI and did not classify the aforementioned material as UPSI.
In December 2022, Goenka received a show cause notice from the regulator as a result. After that, Goenka consented to resolve the dispute “without admitting or denying the findings of fact and conclusions of law.”
Goenka has paid ₹50 lakh to resolve the issue and to have charges dropped against him.
