Punit Goenka takes a back seat following Sebi order; Interim panel to run Zee

New Delhi: A week after the Securities Appellate Tribunal (SAT) dismissed pleas of Zee Entertainment promoters Subhash Chandra and Punit Goenka challenging Sebi's interim order restraining them from holding any directorship or key managerial positions in listed entities, Goenka took a back seat from running the operations. However, Goenka has not resigned as CEO.

ZEEL Board of Directors Monday formed an internal committee of senior executives to run the operations of the company.

"Since the order restricts Mr. Punit Goenka from holding the position as director or key managerial position in a listed company, the Board of the Company has constituted an Interim Committee of senior executives to ensure smooth operations of the Company. The Interim Committee will be under the supervision of the Board and will seek its guidance on all matters pertaining to the Company," ZEEL said in a statement.

"In the instant case we find that an ex parte ad interim order was issued considering the sense of urgency which was infused by a host of circumstances, namely, diversion of funds from a listed company to related parties which are controlled by the appellants," the SAT order stated on July 10.

It said, "In the absence of any evidence being filed by the appellants before us, we do not find any perversity, irregularity, illegality or irrationality in passing of the impugned order."

"We do not find any reason to interfere in the impugned order at this stage and we dispose of the appeals directing the appellants to file a reply/objection along with a stay vacating application to the ex parte ad interim order dated June 12, 2023 within two weeks from today," the order added.

On June 19, the counsel for Zee Entertainment Enterprises said the market regulator had no evidence beyond the bank statements to prove the allegations of round-tripping of funds and that Sebi cannot pass an ex-parte order.

The counsel said Zee Entertainment Enterprises wanted a stay on the Sebi order.

"All entities, through which Sebi alleges round-tripping, have genuine business relations with Zee," the counsel further added.

Earlier, in its reply to SAT, Sebi had alleged that Chandra and Goenka have diverted public funds to private entities, which calls for urgent action.

"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," Sebi said in its affidavit to SAT.