The planned merger deal between Zee Entertainment and Sony’s India unit could face a snag because of a recent Securities and Exchange Board of India (SEBI) order against Shirpur Gold Refinery.

What Happened? Multiple reports said that the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have filed affidavits with the company law tribunal saying that SEBI had instructed the exchanges to inform the tribunal of a recent order passed against Shirpur, which is an Essel Group company.

Punit Goenka, the CEO of Zee Entertainment, and members of his family are shareholders of Jayneer Infrapower, which is one of the promoters of Shirpur. According to the SEBI order, Shirpur diverted assets worth over ₹400 crore between 2019 and 2021 for the benefit of its connected entities. Part of this diverted capital allegedly reached Jayneer.

See Also: Royal Enfield Maker Sees Shares Surge After Q4-Print: Here’s Why

SEBI alleges that Shirpur and its promoters exploited insolvency law, barring them from divesting their stakes.

The company law tribunal has asked NSE and BSE to review their approvals for the Sony-Zee merger in light of the new information.

The proposed merger has been marred by several roadblocks and legal hurdles, including insolvency claims by creditors.

Price Action: Zee Entertainment shares fell as much as 5.6% in early trade following the news.

See Also: WhatsApp Under Fire: Indian Government Questions Platform’s Role In International Spam Calls