SAT rejects Subhash Chandra, Punit Goenka's plea against Sebi order

Mumbai: The Securities Appellate Tribunal (SAT) on Monday 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.

The appellate tribunal on June 27 had reserved its order on petitions filed by Essel Group Chairman Subhash Chandra and ZEEL Managing Director and CEO Punit Goenka that challenged the Securities and Exchange Board of India's (Sebi's) interim order which restrained the duo from holding board positions in public listed companies for a year on account of alleged fund diversion.

"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.

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.