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Subhash Chandra, the chairman emeritus of Zee Entertainment Enterprises Ltd (ZEEL), has leveled serious accusations against Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), alleging that her actions directly led to the failure of the proposed merger between Zee and Sony. In a press conference held on September 2nd, Chandra went so far as to label Buch "corrupt" and "vindictive," claiming that SEBI's involvement in the matter was the primary reason for the deal's collapse.
Chandra's accusations stem from his belief that SEBI's actions were not in the best interest of ZEEL's investors. He asserts that the merger was progressing smoothly and had even secured approvals from SEBI and the stock exchanges. However, Chandra claims that SEBI intervened by instructing the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) to interfere in the proceedings of the National Company Law Tribunal (NCLT), ultimately frightening Sony into terminating the merger. This, he argues, resulted in significant financial losses for ZEEL's minority shareholders.
Beyond the general allegations of corruption, Chandra has made specific claims about Buch's personal enrichment since assuming her position at SEBI. He alleges that her and her husband's combined annual income has skyrocketed from approximately ₹1 crore to ₹40-50 crore, suggesting financial impropriety. He has urged media outlets and investigative agencies to scrutinize these claims, including examining the settlement and compounding of cases as well as the consultation fees received by Buch and her associates. Chandra believes that these activities represent a pattern of extortion from corporations and corrupt stock market operators.
Chandra also points to a letter he wrote on January 25th, 2019, as evidence of SEBI's alleged interference. This letter addressed a situation where ZEEL shares had plummeted by 33%, leaving the company unable to meet a margin call. In the letter, Chandra assured lenders that the group's operating companies were performing well and that the debt exposure was a result of investments made in ventures like Essel Infra and the acquisition of D2H. He attributed the negative forces against the group to actions that began in May/June 2018 and mentioned complaints filed with SEBI and other authorities without any subsequent action. He urged lenders to be patient, assuring them that the company would be able to repay its debts once the Zee stake sale was complete.
Further fueling Chandra's accusations, he claims that communications between Buch and former ICICI Bank CEO Chanda Kochhar reveal a pattern of illicit activities. He alleges that both women and their respective husbands collaborated in a scheme that led to Buch receiving substantial sums of money from ICICI while she was a Whole Time Member at SEBI. This, he claims, demonstrates a clear pattern of corruption and conflict of interest.
While Business Today has reached out to SEBI for a response, it remains to be seen whether Buch will address these allegations publicly. The weight of Chandra's accusations raises serious questions about the integrity of SEBI's operations and the potential for corruption within the regulatory body. This situation highlights the importance of transparency and accountability in the financial sector, and the need for thorough investigations to ensure fairness and protect the interests of investors.
Source: SEBI intervention spooked Sony, scuttled merger with Zee, alleges Subhash Chandra