Shiva Joshi, Pune
On Monday, the Security Appellate Tribunal rejected an appeal. It declined to give an immediate stay of the market regulator SEBI’s judgment against Subhash Chandra and Punit Goenka of Zee Entertainment.
The petitioners are anticipated to appeal the decision to the Supreme Court, a person with knowledge of the issue said on the condition of anonymity.
The petitioners Goenka and Chandra were given two weeks to contact Sebi with their response by the bench, which was presided over by judicial member Tarun Agarwala and technical member Meera Swarup. Sebi was then instructed to issue its decision within a week.
While rejecting to disregard the regulator’s instructions, the SAT stated that it did not see the need to interfere with the order and instructed the pair to defend themselves before SEBI.
As much as 5.7% of Zee’s shares dropped following the decision. After losing 25.2% in 2022, the stock is currently down 16.6% this year.
Subhash Chandra, chairman of the Essel Group, and Punit Goenka, managing director and CEO of ZEEL, were prohibited from holding any directorships or key managerial positions in listed entities by an ex-parte interim order issued by the Securities and Exchange Board of India (SEBI) on June 12 due to an alleged fund diversion.
Late in June, Sebi’s attorney Darius Khambata argued that information obtained by the market regulator over the previous four months revealed alleged cash siphoning and demonstrated that more investigations were already in progress. The market regulator’s actions, according to Khambata, are supported by evidence.
Senior attorney Janak Dwarkadas, arguing on behalf of Goenka, said that Sebi had violated the employment rights of two important individuals by expelling them from the business.
While Sebi had issued the interim judgment against them, he further stated that Yes Bank had not received a directive for taking the Rs 200 crore fixed deposit without the consent of ZEEL.
According to Dwarkadas, investigations have not turned up any evidence that the transactions are fraudulent or that the promoter’s participation is actively improper.