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Ministry of Corporate Affairs to inspect ZEE’s books

In November, two non-exec directors - Subodh Kumar and Neharika Vohra – had alleged governance lapses.

Last Updated: Feb 04, 2020, 09.44 PM IST
MUMBAI: The Ministry of Corporate Affairs (MCA) has directed its western region head to inspect the books of Zee Entertainment Enterprises (ZEE). The enquiry follows resignations of a few of its independent directors, who raised corporate governance issues.

According to sources the enquiry will be carried in accordance with Section 206 of the act. The said provision allows the ministry to furnish in writing information or explanation; or to produce documents, within such reasonable time, as may be specified in the notice.

“The books have been called in to verify them and post the examination, the next action of calling the board members will be taken,” said an official privy to the developments. “The probe will look into the allegations levelled by the past independent directors who quit recently. The mandate of the ministry is to probe the issue of corporate governance,” added the official.

Replying to an ET query, a ZEE spokesperson confirmed that MCA has asked to furnish certain information under section 206 of the Companies Act for their inspection. “However the same is not related to any corporate governance issue. ZEE has always adhered to the highest levels of corporate governance, maintaining utmost transparency across all aspects,” the spokesperson said.

On November 25th, two of the non-executive directors - Subodh Kumar and Neharika Vohra – had alleged governance lapses on matters such as treasury operations, related-party deals, film financing and corporate social responsibility expenses. The media company had refuted the allegations.

Another independent director Sunil Sharma had also resigned, stating personal reasons.

Later, ZEE clarified that all the points expressed by the directors were disclosed in the public domain, through various investor and shareholder communication modes.

ZEE stock fell 4.17% on BSE on Tuesday to close at Rs 245.05 apiece.

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