SEBI revises directions for Subash Chandra, Punit Goenka; enquiry to be completed in 8 months

After the regulator had filed the interim order on June 12, Chandra and Goenka had approached the Securities Appellate Tribunal (SAT).

The market regulator has revised the directions it had given in the matter of Zee Entertainment Enterprises’ (ZEEL’s) former directors Subash Chandra and Punit Goenka, and has asked its investigating officials to complete the enquiry in eight months and asked both noticees not to hold any Board or Key Managerial Personnel (KMP) position in ZEEL, its subsidiary companies or any company resultant from a merger with these companies.

In the interim order passed on June 12, 2023, the Securities and Exchange Board of India (Sebi) had said that the Chandra and Goenka were not to hold any Board position or Key Managerial Personnel (KMP) position in any listed company or subsidiaries until further orders.

Also read: Sebi bars Subhash Chandra, Punit Goenka from holding directorial, key managerial roles

This was because, as the June 12 order stated, they had “alienated the assets of ZEEL and other listed companies of Essel Group for the benefit of Associate Entities, which are owned and controlled by them. The siphoning of funds appears to be a well-planned scheme since, in some instances the layering of transactions involved using as many as 13 entities as pass through entities within a short period of two days only."

In the latest confirmatory order, signed by the Chairperson Madhabi Puri Buch and dated August 14, the regulator stated, “The investigation in the matter by SEBI shall be completed in a time-bound manner and in any event, within a period of 8 months from the date of this Order.”

It added that both Chandra and Goenka are not to hold position of a Director or a KMP in Zee Entertainment Enterprises, Zee Media Corporation, Zee Studios, Zee Akaash News Pvt Ltd., any resultant company that is formed pursuant to a merger or amalgamation of the above named companies with any other company, wholly or in part; and any company, which is formed pursuant to demerger of any of the above named companies.

After the regulator had filed the interim order on June 12, Chandra and Goenka had approached the Securities Appellate Tribunal (SAT). SAT, in its order dated July 10, disposed off the appeal saying that it found no reason to interfere with the Sebi order and by directing the appellants to file a reply/objection along with an application to vacate the stay given in the interim order.

Also read: In five charts: How ZEEL’s funds were routed back to itself, according to Sebi

Sebi gave the notices an opportunity for personal hearing on July 31 and, following that, asked for additional documents to better appreciate their submissions.

Post hearing, through letters, the two reiterated their submissions as made in their previous reply and at the time of hearing.