Within eight months, SEBI will wrap up its examination of the Zee Entertainment matter

16 Aug 2023 , 10:59 AM

In a revised decision, SEBI Chairman Madhabi Puri Buch stated that the inquiry into the issue involving Zee Entertainment Enterprises Ltd founders Subhash Chandra and Punit Goenka would be finished within eight months.

Subhash Chandra and Punit Goenka will not hold any directorship posts in any Essel Group entities up till the probe is finished, the regulator said.

This was stated by the regulator as part of the confirming order against the two people.

Subhash Chandra, chairman of the Essel Group, and Punit Goenka, CEO of Zee Entertainment, were prohibited from holding any important managerial positions until further notice by an interim decision issued by the stock market regulator on June 13.

Investigations indicated Chandra and Punit Goenka had misappropriated cash in 2019 while serving as directors of Zee Entertainment, leading to the passing of the order.

The Goenkas, however, petitioned the Securities and Appellate Tribunal to halt the SEBI order. SAT, however, decided not to give a stay of the temporary injunction.

The Goenkas were required to provide a response and a motion to rescind the ex-parte ad-interim order within two weeks by the appellate panel in order to resolve the appeals.

On July 27, the tribunal ordered SEBI to name a new full-time member to serve as a hearing member for Punit Goenka and Subhash Chandra. It was noted that the April 2023 Shirpur Gold Refinery order, to which the father and son are not parties, had an impact on SEBI’s decision against the father-son team.

Ashwani Bhatia, a full-time employee of SEBI, had approved the decisions in both instances.

Ananth Narayan was appointed as a whole-time member or a person with the authority to issue an order on the matter after Sebi requested that the SAT modify the order.

The intended merger of Zee Entertainment and Sony Pictures was derailed by Sebi’s interim decision in June since one of the primary terms of the agreement was that Goenka would lead the combined company.

However, over three years after the formal announcement, Zee Entertainment last week won the National Company Law Tribunal’s permission for the merger plan.

Even if the demerger takes effect within the allotted 8 months, Goenka will be prohibited from taking any positions in the combined company thanks to the confirming order issued by SEBI on Monday.

Buch wrote in the ruling, ‘I note that a thorough investigation in the subject is in progress, which may reveal more acts of the entities, if any, of omission or commission, depending on the material and after examining the facts and the sincerity of their representations.

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