The Securities and Exchange Board of India (Sebi) has rejected the settlement applications filed by Zee Entertainment Enterprises Ltd and its CEO Punit Goenka.

The regulator on Thursday said it will also conduct “further investigation’’ against the two entities and Zee group founder Subhash Chandra.

In an interim order in June 2023, Sebi had barred Chandra and Goenka from holding the position of a director or key managerial personnel (KMP) in any listed company for alleged fund diversion.

Subsequently, a confirmatory order against the duo was passed in August 2023, which was stayed by the Securities and Appellate Tribunal (SAT).

In a three-page order issued on Thursday, Amit Kapoor, adjudicating officer (AO), said it will slap a fresh show cause notice (SCN) on Chandra and his son Goenka. This new SCN will incorporate the findings recorded in an earlier notice.

Sebi had first issued SCN to them in July 2022 after which settlement applications were filed by Zee and Goenka. However, the panel of whole time members of Sebi rejected the settlement applications.

“It has been observed that subsequent to completion of investigation in the instant matter, it has been decided by the Competent Authority to proceed against the noticees under Section 11B of Sebi Act 1992,’’ Kapoor said in his order.

Sebi had initially appointed Parag Basu as AO on October 28, 2021. Subsequently, the matter was re-assigned due to the transfer of appointed AOs and Kapoor was given the charge on December 27, 2024.

According to the latest order, the allegations in SCN of July 6, 2022 issued by AO will be subsumed with the findings of the further investigation carried out by Sebi

“Accordingly, the content of the SCN dated July 6, 2022 issued by the AO including the examination report and all the relied upon documents will be treated as integral part of the further investigation report by Sebi in the matter of Zee. b) The contents of SCN dated July 6, 2022 issued by AO to noticees will also be incorporated in SCN...,’’ Sebi said.