UPSC Prelims Practice Questions — SEBI fines Zee ₹1.5-crore for corporate misgovernance

Q1. With reference to the transaction that formed the basis of SEBI's 2026 final order against Zee Entertainment Enterprises Ltd (ZEEL) and its promoters, consider the following: 1. A Deposit and Declaration Agreement covering ZEEL's Hyderabad property was executed in December 2018. 2. The borrowings secured by the deposit of the original title deeds were raised by Essel Home and other Essel Group-linked entities. 3. The original title deeds continued to remain with the lender until June 2020. 4. SEBI found that the transaction had the prior approval of ZEEL's audit committee, but was withheld from the statutory auditors. Which of the above is/are correctly identified?

  1. A Deposit and Declaration Agreement covering ZEEL's Hyderabad property was executed in December 2018.
  2. The borrowings secured by the deposit of the original title deeds were raised by Essel Home and other Essel Group-linked entities.
  3. The original title deeds continued to remain with the lender until June 2020.
  4. SEBI found that the transaction had the prior approval of ZEEL's audit committee, but was withheld from the statutory auditors.
  • A. 1, 2 and 3 only
  • B. 1 and 4 only
  • C. 2, 3 and 4 only
  • D. 1, 2, 3 and 4

Q2. Under the Securities and Exchange Board of India Act, 1992, the authority competent to appoint an adjudicating officer for adjudging penalties is which one of the following?

  • A. The Central Government, acting on the recommendation of the Department of Economic Affairs in the Ministry of Finance
  • B. The Board itself, which appoints one of its own officers not below the rank of a Division Chief
  • C. The Presiding Officer of the Securities Appellate Tribunal, from among the serving members of the Tribunal
  • D. The Central Government, from among officers of the Indian Corporate Law Service serving in the Ministry of Corporate Affairs

Q3. With reference to the constitution and statutory basis of the Securities and Exchange Board of India, consider the following: 1. SEBI was accorded statutory status by an Act of Parliament in 1992. 2. Of the members of the Board other than the Chairman, at least three are required to be whole-time members. 3. Every member of the Board, including the nominee of the Reserve Bank of India, is appointed by the Central Government. 4. The Board is required to have its head office at New Delhi, with regional offices elsewhere in India. Which of the above is/are NOT correct?

  1. SEBI was accorded statutory status by an Act of Parliament in 1992.
  2. Of the members of the Board other than the Chairman, at least three are required to be whole-time members.
  3. Every member of the Board, including the nominee of the Reserve Bank of India, is appointed by the Central Government.
  4. The Board is required to have its head office at New Delhi, with regional offices elsewhere in India.
  • A. 1 and 2
  • B. 3 and 4
  • C. 2 only
  • D. 1, 3 and 4

Q4. Consider the following statements comparing SEBI with other bodies in India's corporate and securities-market framework: 1. SEBI derives its powers from an Act of Parliament of 1992, whereas the National Company Law Tribunal is a body constituted under the Companies Act, 2013. 2. SEBI can impose monetary penalties but, unlike the Competition Commission of India, it cannot restrain an entity from accessing the securities market. 3. The Securities Appellate Tribunal, like SEBI, functions from Mumbai, but unlike SEBI it must be presided over by a sitting or retired judge of the Supreme Court or of a High Court. Which of the statements given above is/are correct?

  1. SEBI derives its powers from an Act of Parliament of 1992, whereas the National Company Law Tribunal is a body constituted under the Companies Act, 2013.
  2. SEBI can impose monetary penalties but, unlike the Competition Commission of India, it cannot restrain an entity from accessing the securities market.
  3. The Securities Appellate Tribunal, like SEBI, functions from Mumbai, but unlike SEBI it must be presided over by a sitting or retired judge of the Supreme Court or of a High Court.
  • A. 1 only
  • B. 1 and 2 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q5. Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prior approval of which body is the first and mandatory requirement for every related party transaction of a listed entity?

  • A. The nomination and remuneration committee of the listed entity
  • B. The stakeholders relationship committee of the listed entity
  • C. The audit committee of the listed entity
  • D. The risk management committee of the listed entity

Q6. Under the scale-based materiality framework for related party transactions approved by SEBI in 2025, what is the upper ceiling of the turnover-linked threshold beyond which a listed entity's related party transaction is treated as material and requires prior shareholder approval?

  • A. ₹1,000 crore
  • B. ₹2,500 crore
  • C. ₹5,000 crore
  • D. ₹10,000 crore

Q7. Consider the following statements about SEBI's proceedings against Zee Entertainment Enterprises Ltd (ZEEL) and its promoters: 1. Before the final order was passed, SEBI had rejected the settlement application filed by ZEEL and Punit Goenka in the listing-disclosure matter and widened the investigation to bring Subhash Chandra within its scope. 2. The final order restrained Subhash Chandra and Punit Goenka from the securities market for one year, while ZEEL itself was restrained for a shorter period of two months. 3. In the final order, the heaviest monetary penalty was imposed on ZEEL, the listed company, rather than on either of the two individual promoters. Which of the statements given above is/are correct?

  1. Before the final order was passed, SEBI had rejected the settlement application filed by ZEEL and Punit Goenka in the listing-disclosure matter and widened the investigation to bring Subhash Chandra within its scope.
  2. The final order restrained Subhash Chandra and Punit Goenka from the securities market for one year, while ZEEL itself was restrained for a shorter period of two months.
  3. In the final order, the heaviest monetary penalty was imposed on ZEEL, the listed company, rather than on either of the two individual promoters.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. A composite scheme of arrangement for combining two listed Indian media companies attains legal effect on sanction by which one of the following?

  • A. The Competition Commission of India, whose clearance of the combination operates as the sanction of the scheme
  • B. The National Company Law Tribunal, after the stock exchanges and SEBI have processed the scheme and issued observation letters
  • C. A whole-time member of SEBI, by an order issued under Section 11B of the SEBI Act, 1992
  • D. The National Company Law Appellate Tribunal, exercising original jurisdiction over schemes involving listed companies

Q9. Consider the following statements regarding remedies available to minority shareholders of an Indian company: 1. An application alleging oppression and mismanagement under Section 241 of the Companies Act, 2013 ordinarily requires the support of members holding not less than one-tenth of the issued share capital, whereas Section 245 provides for a class action before the National Company Law Tribunal. 2. In 2026 the Principal Bench of the National Company Law Tribunal rejected objections to maintainability and allowed a class action by minority shareholders of Jindal Poly Films to proceed. 3. A class action under Section 245 can be maintained only against the company and its directors, and relief cannot be sought against its auditors or advisers. Which of the statements given above is/are correct?

  1. An application alleging oppression and mismanagement under Section 241 of the Companies Act, 2013 ordinarily requires the support of members holding not less than one-tenth of the issued share capital, whereas Section 245 provides for a class action before the National Company Law Tribunal.
  2. In 2026 the Principal Bench of the National Company Law Tribunal rejected objections to maintainability and allowed a class action by minority shareholders of Jindal Poly Films to proceed.
  3. A class action under Section 245 can be maintained only against the company and its directors, and relief cannot be sought against its auditors or advisers.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q10. With reference to the Securities Appellate Tribunal (SAT), consider the following: 1. Appeals against orders of SEBI, of the Insurance Regulatory and Development Authority of India and of the Pension Fund Regulatory and Development Authority lie to the SAT. 2. An appeal to the SAT is ordinarily to be filed within forty-five days of receipt of a copy of the order, and the Tribunal may condone delay for sufficient cause. 3. An order of the SAT may be appealed against before the High Court within sixty days on any question of fact or of law arising from the order. 4. The Tribunal comprises a Presiding Officer and two other members, and an appeal against a regulator's order is heard by a bench of three. Which of the above is/are NOT correct?

  1. Appeals against orders of SEBI, of the Insurance Regulatory and Development Authority of India and of the Pension Fund Regulatory and Development Authority lie to the SAT.
  2. An appeal to the SAT is ordinarily to be filed within forty-five days of receipt of a copy of the order, and the Tribunal may condone delay for sufficient cause.
  3. An order of the SAT may be appealed against before the High Court within sixty days on any question of fact or of law arising from the order.
  4. The Tribunal comprises a Presiding Officer and two other members, and an appeal against a regulator's order is heard by a bench of three.
  • A. 1 and 2
  • B. 2 and 4
  • C. 3 only
  • D. 3 and 4