ZEE's Punit Goenka settles insider trading case for Rs 50 lakh

Punit Goenka, the Managing Director and CEO of Zee Entertainment Enterprises Ltd, on Thursday reached a settlement with the Securities and Exchange Board of India (SEBI) in a case involving an alleged violation of insider trading regulations. As part of the settlement, Goenka paid a fee of Rs 50.7 lakh.

The aforementioned course of action was taken following a proposal made by Goenka to SEBI — to resolve the ongoing legal proceedings through a settlement order — without accepting or denying the findings.

"It is hereby ordered that the instant proceedings initiated against the applicant vide SCN (show cause notice) dated December 22, 2022, are disposed of," Sebi said in its settlement order.

Earlier, an investigation by the regulator revealed that Goenka is believed to have violated insider trading rules by failing to implement effective internal controls within the company to detect unpublished price-sensitive information (UPSI).

Additionally, he neglected to recognise that the information regarding the launch of the company's Cinema 2 Home Service, ZEEPLEX, was considered UPSI.

"These actions indicate a lack of responsibility on Goenka's part and highlight his alleged failure to adhere to established regulations," the watchdog noted.

In December 2022, a show cause notice was issued to him for the alleged flouting of norms. This was preceded by ZEEL's announcement in September 2020 about the launch of ZEEPLEX, which introduced a novel pay-per-view service.

This innovative model allowed consumers to enjoy their preferred films from the comfort of their homes, providing them with convenience and flexibility in content consumption.

Following the issuance of the SCN, the applicant filed a settlement application with SEBI, which recommended settling the matter with a payment of Rs 50.7 lakh. Consequently, Goenka paid the amount and settled the case.

In August 2021, SEBI issued an interim order against 15 entities for allegedly violating insider trading rules by engaging in insider trading activities in Zee Entertainment Enterprises Ltd. The matter was subsequently confirmed by orders issued in September 2021 and February 2022.