Zee promoters approach SAT against Sebi order barring them from key posts

The promoters of Zee Entertainment Enterprises on Tuesday approached the Securities Appellate Tribunal (SAT) to seek relief against the market regulator’s order banning Essel group Chairman Subhash Chandra and Zee MD & CEO Punit Goenka from holding key positions.

SAT will take up the matter for admission on June 15. The promoters’ lawyer said that the Securities and Exchange Board of India (Sebi) had not given a show cause notice before issuing the order, nor did it indicate any urgency for implementing a ban on them. The lawyer said that Sebi’s order had led to a steep fall in the stock prices.

Zee Entertainment chairman R Gopalan said earlier that the board is reviewing the order. In a statement, he said that the company’s board recognises the significant contribution of Subhash Chandra as the company’s founder and the growth and value generation centric leadership showcased by Punit Goenka.

Sebi, in an interim order issued on Monday, alleged siphoning off of funds and assets of Zee and other Essel firms by the promoters. The markets regulator has directed Zee to place the order before the board of directors within seven days while Chandra and Goenka have been provided with a window of 21 days to submit their objections or replies to the allegations before Sebi.

The market regulator initiated the probe following the resignation of two independent directors from the company in November 2019. One of the directors had alleged that the squaring off of the loans was done without the board’s approval.

Highlighting their role in the alleged fund diversion, Sebi observed that the funds followed a circuitous route, where funds originated from Zee or listed companies of Essel Group, passed through various entities owned or controlled by the promoter family and ultimately ended up with Zee.