The entire problem that SEBI has with Puneet Goenka and the Zee group is on the way the repayment of group loans were handled. They had pledged FDs of the parent company, without approval of the board. Eventually, when a group company defaulted, Yes Bank recovered the dues through the pledged FD. The problem was that funds of a listed entity was used to settle dues of an entity that was privately owned by the Zee family. That was something SEBI had raised a major objection to and put a KMP ban. 

There were many outcomes of this SEBI report. For starters, SEBI passed order banning Puneet Goenka and his father Subhash Chandra from holding any KMP (key management person) position for 3 years. Considering the gravity of the allegations, the SEBI has not only struck down the request for a settlement, but also plans to include Subhash Chandra as part of the investigations. But the biggest blow was that the Sony deal was called off, which was unhappy with the idea of having an allegedly tainted person as the CEO of their joint venture. That led to the deal finally collapsing. 

With the plea being rejected, there are few options left before the group. They were betting on the Sony JV deal going through, which would have given them additional stake in the group and also continued the dominance of the family with the CEO role firmly in their pocket. By then, the only recalcitrant holder, Invesco Oppenheimer, had exited Zee and there were really no questions on the group continuing its control. Things changed after the SEBI order on the FD issue, which put restrictions on Goenka holding KMP office. After Goenka was ousted from the CEO position last year, the only leverage that Zee group had was that SEBI would agree to a plea, so things can remain at status quo level.

To be fair, Chandra was a pioneer in the Indian entertainment industry and he single-handedly took on the might of global competition till the turn of this millennium. However, the real mistakes of Zee came nearly a decade later when they made some huge investments in various infrastructure projects, most of which bombed; leading to the debt level spiraling out of control. Back then, Essel group did the right thing to clear the dues by selling their stake. However, that took away their biggest leverage as the company was eventually forced to go for a management change. With less than 4% stake, options are limited!