zee-sebi case: SAT to hear Punit Goenka’s appeal against SEBI order on Sep 8

The Securities Appellate Tribunal (SAT) on Wednesday directed the Securities & Exchange Board of India (Sebi) to file its response by September 4 in an appeal filed by Punit Goenka, the promoter of Zee Entertainment Enterprises Limited (ZEEL). The tribunal will now hear the matter on September 8.

Goenka, who is the MD and CEO of ZEEL, approached the appellate tribunal through the law firm Economic Laws Practice (ELP) to challenge the capital market regulator’s confirmatory order barring him from holding any directorship or managerial position in any listed company or their subsidiaries.

The ZEEL chief has submitted that the capital market regulator’s order be set aside.

The division bench, comprising Justice Tarun Agarwala and technical member Meera Swarup, while allowing Sebi to file its response by September 4, observed that it is not satisfied with Sebi’s timeline of eight months to complete the probe against the alleged wrongdoings by the ZEEL promoters.
The regulator had said in its order that it would complete the probe against ZEEL promoters within eight months from the order’s issuance date.”The merger has happened with the consensus of the shareholders. There is a public interest involved. If the public says he should be the director, then it does have a bearing,” the tribunal observed in its oral remarks.Before this, Senior Counsel Abhishek Manu Singhvi, appearing for Goenka, argued that Goenka has been a director since 2010 and no public interest will be prejudiced if he is made a director. “The merged company has a different paradigm, and there is no chance that he can harm shareholders, and the new entity will be under the control of Sony,” argued Singhvi.Senior Advocate Darius Khambata is appearing for the Sebi in the case.

Last week, Goenka moved the SAT against the Sebi’s confirmatory order that barred him and his father, Subhash Chandra Goenka, from holding directorships or managerial positions in any listed companies or their subsidiaries.

Earlier, the Goenkas had challenged the market regulator’s interim order dated June 12 before the SAT. However, the tribunal did not give any immediate relief.

This time, only Punit Goenka moved the SAT against the confirmatory order, according to multiple sources involved in the matter.

The development happens at a time when the merger deal between ZEEL and Culver Max Entertainment (Sony) has received all the requisite approvals, including from the National Company Law Tribunal, the Competition Commission of India, and the stock exchanges.

Sebi chairperson Madhabi Puri Buch’s August 14 order prevents Punit Goenka from becoming the MD and CEO of the Sony-Zee combined entity until the regulator concludes its investigation in an alleged fund-diversion case against the father-son duo. They are accused of diverting funds from Zee to other Essel Group companies without seeking board approval.