Zee Entertainment Enterprises Ltd (ZEEL) denied a report on Wednesday claiming that the Securities and Exchange Board of India (Sebi) discovered that about Rs 2,000 crore was siphoned from the corporation.

"Reports and rumours pertaining to accounting issues in co. are 'incorrect and false'," the company stated, according to news agency Reuters. "We are in the process of providing all comments requested by Sebi and have extended complete cooperation on all aspects."

Bloomberg reported on Wednesday that the market regulator discovered a "hole" in ZEEL's finances of more than Rs 2,000 crore. It is nearly ten times the amount indicated by Sebi investigators.

In August last year, Sebi barred Zee founders Subhash Chandra and his son Punit Goenka from having executive or director positions in any listed corporation after discovering that they had "abused their position" and siphoned off cash "for their own benefit."

The case made Sony hesitant to put Goenka in charge of the $10 billion merged firm. Goenka refused to relinquish the chief executive officer (CEO) position promised to him in the 2021 deal, prompting the Japanese giant to cancel the merger in January.Zee appealed Sebi's ruling to a higher appellate court and received a partial reprieve in October, allowing Goenka to continue in his executive role while the investigation was ongoing. It has also been seeking to reassure the investors since the deal fell through.

The Economic Times (ET) has reported that Zee is re-engaging with Sony to see whether the merger can be restored. Zee later refuted this.

On Wednesday, Zee's shares plunged more than 10% after Sebi discovered an accounting violation. As of 11 a.m., it was trading 10.36% lower at Rs 173 per share on the BSE.