Zee Entertainment Promoters Approach Securities Appellate Tribunal Against SEBI Ban
The promoters of Zee Entertainment Enterprises, Subhash Chandra and Punit Goenka, have taken the necessary steps to seek relief from the ban imposed on them by the market regulator. In their pursuit of justice, they have approached the Securities Appellate Tribunal (SAT). The SAT will consider the matter for admission on June 15, bringing hope for a favorable outcome.
The lawyers representing the promoters have pointed out that the Securities and Exchange Board of India (SEBI) failed to provide a show cause notice before issuing the ban. Furthermore, SEBI did not provide any explanation for the urgency behind implementing the ban. The sudden ban has had a significant impact on the stock prices, causing a sharp decline.
R Gopalan, the chairman of Zee Entertainment, has announced that the board is currently reviewing the order. Recognizing the substantial contributions made by Subhash Chandra as the founder of the company and the exemplary leadership demonstrated by Punit Goenka, the board remains committed to evaluating the situation thoroughly.
SEBI, in its interim order released on Monday, has alleged that funds and assets of Zee Entertainment and other Essel Group companies were unlawfully diverted by the promoters. In response, SEBI has directed Zee Entertainment to present the order before the board of directors within seven days. Subhash Chandra and Punit Goenka have been granted a window of 21 days to submit their objections or replies to the allegations made by SEBI.
The investigation by the market regulator was initiated after the resignation of two independent directors from the company in November 2019. One of the directors had raised concerns regarding the clearance of loans without the approval of the board. Shedding light on the alleged fund diversion, SEBI discovered that the funds followed a convoluted route, originating from Zee Entertainment or other listed companies within the Essel Group. These funds passed through multiple entities owned or controlled by the promoter family and eventually ended up with Zee Entertainment.
The promoters of Zee Entertainment Enterprises are determined to fight the ban imposed by SEBI and have turned to the Securities Appellate Tribunal for relief. As the matter progresses, it remains to be seen how the tribunal will assess the allegations of fund diversion and whether the ban will be lifted.
The promoters of Zee Entertainment Enterprises have approached the Securities Appellate Tribunal (SAT) seeking relief against SEBI’s order banning Subhash Chandra and Punit Goenka from key positions. SAT will review the matter on June 15, as the promoters’ lawyer argues that SEBI did not provide a show cause notice or indicate urgency. The stock prices have plummeted due to SEBI’s order.