Zee Entertainment says CBI probe into founder Subhash Chandra has no bearing on company

what happened

Zee Entertainment said on Sunday night that it has no connection to matters involving Subhash Chandra and an alleged misappropriation of a 1,322 crore rupee loan. The company issued the statement in connection with an Enforcement Case Information Report, filed after Chandra and others were booked over a loan taken from LIC Housing Finance, according to Moody's.

A Zee spokesperson said the matters concern Chandra and promoter entities linked to him and have no effect on Zee or its operations. The CBI investigation started after a complaint from LICHFL dated August 31. The lender accuses Chandra and others of cheating, criminal conspiracy and breach of trust tied to defaulted loan facilities.

According to the case material, the lender in 2018 extended 500 crore rupees to Vasant Sagar Properties and Pan India Infra Projects after receiving a continuing guarantee letter from Chandra. He also supplied a certificate showing a net worth of 59,113.21 crore rupees as of March 31, 2017, yet the complaint says he earlier denied having such net worth in documents submitted during insolvency proceedings.

why it matters

For Zee Entertainment investors, the key risk is less the loan itself than the possible impact of a criminal case on the founder's reputation and on corporate governance. The company insists its business is not involved, so the market will likely watch how the investigation develops and whether Zee is mentioned in the case material.

market impact

Zee Entertainment shares: criminal case against the founder adds uncertainty around the company

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