New Delhi, Aug 1 (PTI) Sebi has prohibited Zee Entertainment Enterprises Ltd (ZEEL) from the securities market for two months and its Chairman Emeritus Subhash Chandra and MD & CEO Punit Goenka for one year over unauthorised pledge of the company's Hyderabad land to secure loans availed by promoter-linked Essel Group entities.

Additionally, the regulator imposed a total penalty of Rs 1.48 crore on them, according to a 150-page final order passed late on Friday.

Individually, the regulator imposed penalties of Rs 30 lakh on ZEEL, Rs 60 lakh on Chandra, and Rs 58 lakh on Goenka.

The case relates to the execution of a Deposit and Declaration Agreement (D&A) on December 27, 2018, under which the original title deeds of ZEEL's Hyderabad property were handed over to Indiabulls Housing Finance Ltd (IHFL) as security for loans taken by Essel Home and other borrowing entities linked to the Essel Group.

Sebi noted that the deployment of ZEEL's property constituted a related-party transaction and the company failed to obtain prior approval from its audit committee, thereby violating LODR (Listing Obligations and Disclosure Requirements) regulations.

The regulator further observed that ZEEL failed to make necessary disclosures in its financial statements despite Goenka and Chandra having knowledge that the Hyderabad land had been deployed as security and the title deeds remained with the lender until June 2020.

In its findings against Chandra, Sebi said he misused his position as chairman by handing over the original title deeds of ZEEL's Hyderabad property to IHFL after falsely representing that the action had the approval of ZEEL's management.

"Noticee No.3 being the chairman of ZEEL, misused his position and authority in ZEEL and handed over the original title deeds of the asset (Hyderabad Land) of ZEEL to IHFL by falsely declaring that the said action had the approval of the management of ZEEL. Through such actions, the noticee put the material asset of ZEEL at risk for his personal benefit," Sebi said in its order.

It further said the true nature of the transaction was never disclosed and was instead portrayed as a case of misplaced documents, despite becoming the subject of litigation and arbitration.

According to Sebi, Chandra failed to act in good faith, exercise due diligence and safeguard interests of ZEEL and its shareholders, amounting to abuse of his position and authority.

Sebi directed ZEEL, Chandra, and Goenka to pay the penalties within 45 days. The order came into force with immediate effect. PTI SP TRB TRB

Unauthorised pledge of listed-company land triggered securities-market bars for disclosure failures and misuse of management authority. Unauthorised pledge of ZEEL's Hyderabad land as security for loans obtained by promoter-linked entities was treated as a related-party transaction lacking prior audit committee approval. ZEEL failed to disclose the land's deployment in its financial statements. Its Chairman Emeritus was stated to have transferred title deeds by falsely representing management approval and to have concealed the transaction's nature. Securities-market prohibitions and monetary penalties were imposed with immediate effect.