The Securities Appellate Tribunal (SAT) on June 15 refused to pass an interim order on Essel Group chairman Subhash Chandra and Zee Entertainment Enterprises Ltd MD and CEO Punit Goenka’s plea challenging the Sebi interim order that bars them from holding the position of a director or key managerial personnel (KMPS) in any listed company.
The SAT will hear the matter and decide on June 19. The tribunal has asked the Securities and Exchange Board of India (SEBI) to file a reply in the matter before the appellant before 2pm on June 18.
SEBI took action against Chandra and Goenka for allegedly siphoning off funds of Zee Entertainment Enterprises Ltd (ZEEL).
As per a CNBC-TV18 report by Yash Jain and Shilpa Ranipeta, “During the hearing, Goenka’s Counsel argued that the markets regulator has passed an ex-parte order against him and Subhash Chandra and that it is not a show cause notice order, which is why it does not qualify as an urgent order. A post decision hearing could have been granted in the case, the counsel suggested.
Goenka argued that every citizen has the right to carry out a business the way they want. If the investigation claims to have primary facie established siphoning, he can demonstrate there could not have been an investigation.”
“I can show you in a minute that the first company out of the layers to who money was paid has business relations with the company…Can demonstrate this from published accounts…Can assure the court, I will demolish the five examples SEBI has given,” Goenka said, alleging that SEBI has jumped to unwarranted conclusions, according to the CNBC-TV18 report.
It also states, he said the allegation is that he used funds of the company as a piggy bank in 2019-20. He sought 14 days to satisfy SEBI that he has not done so and there is no need for this order.
The report goes on: SEBI counsel told the tribunal that the facts about siphoning came to its attention only in May. The appeal does not give us any details of transactions, the counsel said, adding that Goenka has to explain why over Rs 66 crore circulates through a web of companies back to Zee.
Goenka, meanwhile, claimed that the Zee-Sony merger matter will be heard by the National Company Law Tribunal (NCLT) on June 16 that this has a bearing on and that NCLT will have to take this matter into account.
When SAT asked how this was relevant to the matter at hand, Goenka said he is to be MD and CEO of the merged entity and if this order is stayed, the NCLT matter can proceed.