ED conducts searches at Mumbai office of Essel Group amid ongoing troubles for Zee.

The Enforcement Directorate (ED) is currently conducting search operations at the Mumbai office of the Essel Group, as reported by ET Now on Wednesday. The ongoing searches, initiated in the afternoon, involve questioning officials from the company by the central probe agency. The Continental building premises, which house many offices of Essel Group, the parent company of Zee Media Corporation, are the focus of these investigations. Notable entities operating from these premises include Zee Media Corp, Zee Learn, Mount Litera Edu Foundation, Essel Homes, and Essel Infra & Housing.

Earlier reports on the same day indicated that the Securities and Exchange Board of India (Sebi) was intensifying its probe into Zee, uncovering that an alleged amount between Rs 800 to Rs 1,000 crore may have been siphoned, surpassing the initially reported figure of Rs 200 crore. This substantial increase in the alleged siphoned amount adds to the complexities surrounding the investigations.

In August of the previous year, Sebi had taken action by barring Zee's Punit Goenka and Subhash Chandra from the boardrooms of four Zee group companies, including Zee Entertainment Enterprises Ltd. The action was based on allegations of siphoning off funds amounting to Rs 200 crore for personal benefit. However, the recent revelation suggests a noteworthy escalation in the siphoned amount.

The report indicates that Sebi may be focusing on ZEE MD & CEO Punit Goenka's role as Key Managerial Personnel (KMP) in Essel entities, examining his potential involvement in the misuse of funds. There is speculation that Sebi might uphold its order restricting Goenka from holding positions as a director.

The timing of these developments is particularly unfortunate for Zee shareholders, as the company's stock had already experienced a significant decline of 30 percent on Tuesday. This decline was attributed to the termination of the $10-billion merger deal with Zee by Japan's Sony on the preceding Monday. The confluence of these events adds further challenges and uncertainties for Zee and its stakeholders.