Sony Pictures Entertainment yesterday said it took “seriously” an Indian regulator’s ban on Zee Entertainment’s founder and CEO from holding board positions and will monitor developments that may affect its deal with Zee.

This is Sony’s first comment since the Securities and Exchange Board of India (SEBI) one-year ban announced last week against Zee Group Chairman Subhash Chandra and CEO Punit Goenka, saying they had been actively involved in diverting company funds to the group’s related entities, Reuters has reported.

Zee and an Indian unit of Japan’s Sony Group announced a merger in 2021 to create a $10 billion TV enterprise, with Goenka set to become the merged entity’s managing director and CEO, but regulatory approvals are still pending.

“We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal,” Sony’s statement said.

The latest ban on Goenka by SEBI has triggered worries about potential further delay to the Sony deal.

Zee had denied SEBI’s allegations. Chandra and Goenka have challenged the ban at an Indian appeals tribunal, which is yet to rule on the case. SEBI is arguing the appeals should be dismissed “and no relief must be granted in the interest of the securities market.”

Last year, Zee and Sony offered concessions such as pricing discounts to help ease regulatory concerns and received an antitrust approval for the merger.

Zee did not immediately respond to a request for comment.