Zee row: SAT reserves in Punit Goenka's appeal

Former ZEEL CEO Punit Goenka challenged the order of SEBI that bars him from holding the role of a director or other key managerial position in ZEEL and other firms

The Securities Appellate Tribunal (SAT) on September 27 reserved an appeal by the former chief executive officer of Zee Entertainment Enterprises Ltd (ZEEL) challenging the SEBI order that bars him from holding the post of director or other key managerial positions in ZEEL and other firms.

Senior advocate Abhishek Manu Singhvi appeared for Goenka, while senior advocate Darius Khambata appeared for the Securities Exchange Board of India (SEBI)

The appellate tribunal reserved orders in the plea after hearing it for over five sessions from August 30. During the course of the hearing, the SAT orally observed that it is not satisfied with the amount of time taken by the market regulator for investigation, saying, "SEBI can’t keep going on with its investigation." It further noted that the matter involves public interest owing to the recent merger of ZEEL with Sony.

SAT further questioned the SEBI on whether it would be able to finish the investigation against Punit Goenka. The appellate tribunal further remarked that SEBI has on a lot of occasions sought for extension of time to investigate allegations from either the Supreme Court or SAT.

In August, SEBI passed an order revising the directions it had given to ZEEL's former directors Subash Chandra and Goenka asking its investigating officials to complete the enquiry in eight months. It further barred them from holding key managerial positions till the conclusion of the investigation.

In June, the regulator passed an interim order restricting Chandra and Goenka from holding any board or key managerial position in ZEEL, its subsidiary companies or any company resulting from a merger with these companies.

Goenka and Chandra appealed against this order at the SAT, but the tribunal refused to stay the same. The father-son duo were directed by SAT to file a reply/objection along with an application to vacate the stay given in the interim order.

The market regulator alleged that the duo helped move funds out of ZEEL and routed them back to the company through layered and circuitous transactions. They did so by “falsely portraying that ZEEL had received the dues from associate entities”, it said.

SEBI had alleged that Chandra and Goenka had "abused their positions" for personal financial gains. It noted that the Mumbai-based media house had faked the recovery of loans to cover private financing deals by its founder Chandra.

These developments coincide with the National Company Law Tribunal (NCLT) approving the merger of ZEEL with Culver Max Entertainment, earlier Sony Pictures Networks India.

In December 2021, Zee Entertainment and Sony Pictures reached an agreement to combine their businesses.