Indian ministry examines market regulator’s allegations against Zee

India’s Ministry of Corporate Affairs (MCA) is examining irregularities in Zee Entertainment Enterprises as alleged by the market regulator, ET Now reported on Friday.

The MCA has taken cognizance of the Securities and Exchange Board of India’s (SEBI) interim order which alleged bogus book entries and siphoning of funds, and is probing lapses in corporate governance issues, the report added, citing sources.

However, the MCA has not issued an inspection order, the report added.

Zee is not aware of any MCA probe and has not received a notice from the ministry, a source aware of the matter told Reuters.

Shares of the media and entertainment company fell as much as 3.9% after the report before paring most losses to last trade down 0.3%.

Both MCA and Zee did not immediately respond to Reuters’ request for comment.

SEBI on June 12 had banned Zee’s Chairman Subhash Chandra and CEO Punit Goenka from holding any board positions in listed companies for a year, alleging active involvement in the diversion of funds to the group’s other listed entities and related firms related to founding shareholders.

The company last month said it formed an internal committee to run its operations after Chandra and Goenka failed to overturn the market regulator’s ban on them holding board positions. Reuters