SEBI Probe on Zee Drags On, Promoter Overhang Continues and Investors Stay on Edge

Zee Entertainment Enterprises Ltd continues to face regulatory uncertainty after SEBI issued a fresh show‑cause notice on February 12, 2026. The notice targets promoters Subhash Chandra and Punit Goenka along with 84 related entities for alleged fund diversion. 

Regulatory Timeline and Interim Orders 

The first interim order was released on June 12, 2023, alleging diversion of approximately ₹200 crore to private entities linked to the promoter group. The order barred both promoters from holding key managerial positions in listed companies.  

A confirmatory order on August 14, 2023 reinforced these restrictions. Zee challenged the interim order before the Securities Appellate Tribunal, which overturned the directions on October 30, 2023. Despite the tribunal decision, SEBI has not issued a final order and has now issued a second show‑cause notice. 

Impact on Share Price and Market Capitalisation 

Since the merger announcement with Sony, Zee’s share price has fallen to around ₹90, reflecting a market capitalisation of roughly ₹8,600–₹8,700 crore.  

At the time of the merger proposal, the company’s market capitalisation was between ₹28,000 and ₹30,000 crore, and the combined entity was valued at over $10 billion.  

The stock remains down about 35% from its pre‑merger level, indicating the weight of regulatory overhang on investor sentiment. 

Read More: SEBI Begins Comprehensive Review of PMS Regulations, Consultation Paper Expected in June! 

Legal and Penalty Framework 

Under the PFUTP Regulations and Sections 11, 11B and 15HA of the SEBI Act, violations can attract penalties up to ₹25 crore or three times the alleged gains, along with possible disgorgement, market debarment and prohibition from directorship roles.  

The prolonged investigation, which may extend for several more years, underscores the material risk that regulatory delays pose to shareholders. 

Shareholder Composition 

Public and small investors account for roughly 96% of Zee’s equity, representing about 6.5 lakh shareholders. The promoter group holds approximately 4% of the equity, highlighting the disproportionate influence of the regulatory issue on a broadly held company. 

Zee Entertainment Enterprises Share Price Performance  

As of February 24, 2026, at 9:23 AM, Zee Entertainment Enterprises share price on NSE was trading at ₹90.44 down by 0.35% from the previous closing price.  

Conclusion 

SEBI’s ongoing investigation has sustained a promoter overhang on Zee Entertainment, contributing to a significant decline in share price and market capitalisation. The final regulatory outcome remains pending, leaving investors without a clear resolution timeline. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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