GECs
Hungama suspends private equity plans
MUMBAI: Hungama TV has defered its plans for private placement of equity as it has substantially closed its funding requirements of Rs 622 million.
Hungama TV has put together Rs 520 million through equity and debt. UTV has already invested Rs 100 million from the proceeds of the stake sale in Vijay TV to Star Group in August 2004 and is expected to invest another Rs 100 million from its initial public offering (IPO). UTV’s investment of Rs 200 million is bifurcated between investment into equity and convertible preferential shares.
Promoter Ronnie Screwvala is investing Rs 98.5 million, representing his share of equity participation in Hungama TV. His holding in the kids channel is 51 per cent while 49 per cent is with UTV, a company of which he is the founder-promoter.
Hungama TV has got approval for a fresh debt of Rs 120 million, in addition to Rs 100 million raised from UTI Bank. With this, Hungama TV has tied up a funding of Rs 520 million.
There is, thus, no need in the near future to find an equity investor. The mandate to Lazard for the private placement has expired and no fresh arrangement has been struck to revive talks with private equity investors.
“Since the funding requirement is substantially closed, we have deferred our efforts on inviting private equity in Hungama TV. The earlier mandate given to Lazard is not pursued by us anymore. We will at the appropriate time start the process of inviting private equity investment, depending on the future requirements of Hungama TV,” informs D’Mello.
Screwvala had earlier stated that a part of the equity stake in the kids channel would be offered to investors through a private placement. But after the sale of Vijay TV and with plans to float an IPO in February, Screwvala has decided to wait for Hungama TV to mature before diluting stake in the channel. The kids channel was launched in September 2004.
GECs
Sebi sends show-cause notice to Zee over fund diversion, company responds
Regulator questions 2018 letter of comfort and governance lapses; company vows robust legal response
MUMBAI: India’s markets watchdog has reignited its long-running scrutiny of Zee Entertainment Enterprises, issuing a sweeping show-cause notice that drags the broadcaster and 84 others into a widening governance storm.
The notice, dated February 12, has been served by the Securities and Exchange Board of India to Zee, chairman emeritus Subhash Chandra and managing director and chief executive Punit Goenka, among others. At its heart: allegations that company funds were indirectly routed to settle liabilities of entities linked to the Essel Group.
The regulator’s probe traces its roots to November 2019, when two independent directors resigned from Zee’s board, flagging concerns over the alleged appropriation of fixed deposits by Yes Bank. The deposits were reportedly adjusted against loans extended to Essel Group entities, triggering questions about related-party dealings and board oversight.
A key flashpoint is a letter of comfort dated September 4, 2018, issued by Subhash Chandra in his dual capacity as chairman of Zee and the Essel Group. The document, linked to credit facilities availed by certain group companies from Yes Bank, was allegedly known only to select members of management and not disclosed to the full board—an omission SEBI believes raises red flags over transparency and governance controls.
Zee has pushed back hard. In a statement, the company said it “strongly refutes” the allegations against it and its board members and will file a detailed response. It expressed confidence that SEBI would conduct a fair review and signalled readiness to pursue all legal remedies to protect shareholder interests.
The notice marks the latest twist in a saga that has shadowed the broadcaster since 2019. What began as boardroom unease has morphed into a full-blown regulatory confrontation. The final reckoning now rests with SEBI—but the reputational stakes for Zee, and the message for India Inc on governance discipline, could scarcely be higher.
