A day after Zee Entertainment Enterprises chairman emeritus Subhash Chandra said the founder group wants to raise its stake, the Securities and Exchange Board of India has reportedly taken notice.

The market regulator is examining whether his statements could be a breach of disclosure norms and insider trading code, Moneycontrol reported on Tuesday.

In a recent interview with The Economic Times, Chandra said that over time, the promoters are looking to increase their stake in the company from the current 4% to 26%.

“…The promoter family is indeed considering raising its stake in the company. I've personally encouraged both my immediate and extended family to increase their holdings in Zee… While it may take some time, we are working toward acquiring an additional 5% soon - and eventually holding 26%,” Chandra had told ET.

His interview came days after the Sony Group Corp. called off the $10 billion merger of its India unit with Zee. Sony had said that Zee failed to meet certain conditions of the agreement terms and sought termination fees of $90 million.

“If promoters are indeed increasing their stakes, it needs to be verified if the decision was made after all due procedures. It also needs to be ascertained if any of the insiders were privy to the news and whether there is a funding plan in place,” one of the people aware of the developments told Moneycontrol.

According to SEBI’s rules, shareholders must be informed of any material event through stock exchanges. If promoters are hiking stakes, the proposal must be made to the board and then to investors. This is to prevent the information leading to manipulation of stock prices.

The Zee group has run into trouble with the market regulator multiple times. SEBI is currently probing Chandra and Zee CEO Punit Goenka’s involvement in siphoning funds from the company and the group; the money was allegedly diverted to other entities owned by the promoter group.

In June last year, the market regulator had barred Goenka and Chandra from holding key managerial positions in any listed company. While the ban was later overturned, the appellate tribunal had warned it was subject to what SEBI’s ongoing investigation found. In an older edition of the News Explainer, we wrote that SEBI could be looking at diversions worth Rs 800-1,000 crore, nearly 5 times the misuse it found in phase one of its probe.

Chandra has previously accused SEBI of being a “negative force” and “acting with predetermined mind”. On Tuesday, however, Zee Entertainment said that it could neither confirm nor deny the report that his statement was being scrutinized by SEBI. It said that the statement in the “article does not represent a decision or proposal that has been considered or approved by the Board”.

“The Company is not aware of any information that has not been announced to the exchanges which could explain the aforesaid movement in the trading… As such, the Company has no disclosures to make to the stock exchanges as on date in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’),” it said in a stock exchange filing.

Meanwhile, the Mumbai bench of the National Company Law Tribunal has agreed to hear a petition by a minority shareholder seeking the implementation of the merger. Shareholders were the worst hit as news of the merger being called off eroded Zee’s stock value. The tribunal also asked Sony Pictures Networks India—now Culver Max—to file its response within three weeks. The case will be heard in March.

Zee’s promoters have also gone to the NCLT seeking damages for the merger not going through. Apart from that, Zee has sought emergency arbitration at the Singapore International Arbitration Centre (SIAC). The company has denied it breached terms of the merger agreement and called Sony's demand for $90 million in termination fees legally untenable. According to a CNBC-TV18 report, the SIAC will hold a hearing on 31 January.

Also read | A blow-by-blow account of how the Sony-Zee merger came undone & Merger with Sony in limbo, is Zee back on the market? & A merged Sony-Zee will be better off without Punit Goenka