Punit Goenka and Subhash Chandra of Zee Entertainment are prohibited by SEBI from holding director seats

13 Jun 2023 , 11:49 AM

Subhash Chandra Goenka, chairman of the Essel Group, and Punit Goenka, CEO of Zee Entertainment, are prohibited from holding any important managerial positions by the Securities and Exchange Board of India (SEBI) till further notice.

Investigations revealed Chandra and Punit Goenka misused their authority as directors of Zee Entertainment in 2019 by siphoning off money for their own gain, leading to the issuance of interim orders against the people.

Subhash Chandra and Punit Goenka continue to run Zee Entertainment even though the promoter family only owns 3.99% of the company.

Interim directives must be made to secure the management of such firms and protect their investors and other stakeholders while SEBI’s inquiry is still ongoing, according to Bhatia.

Sunil Kumar and Neharika Vohra, two independent directors of Zee Entertainment, resigned from their positions in November 2019 after expressing a number of concerns, including YES Bank’s use of some of the company’s fixed deposits to pay off loans to affiliated firms of the Essel Group.

In her letter of resignation, Vohra claimed that guarantees were issued to a subsidiary without the board’s consent.

After that, the market regulator looked into the situation, finding that Chandra, the then-chairman of Zee Entertainment, had given a ‘Letter of Comfort’ in support of credit facilities that some of the group companies had requested from Yes Bank.

In the course of the investigation, SEBI discovered that Chandra and Goenka were executing comfort letters on behalf of Zee Entertainment without consulting, informing, or getting the board’s approval, in violation of the disclosure rules.

After passing the interim decision, SEBI has given both parties 21 days to submit their responses.

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