The Securities Appellate Tribunal (SAT) on September 8 deferred the final hearing of SEBI's confirmatory order to September 13 and 14.
Securities Exchange Board of India (SEBI) is expected to finish its arguments on September 13 while Goenka's lawyers are expected to give a rejoinder to SEBI's arguments on September 14.
During the course of the hearing to Senior advocates Abhishek Manu Singhvi and Navroz Seervai, who appeared for Goenka took the courts through various documents to show how SEBI's confirmatory order that barred him from holding any directorship or other key managerial positions in the company and other organisations was unfair. Singhvi reiterated that SEBI had passed the confirmatory order without concluding the investigation, based on mere speculation.
Singhvi also took the tribunal through how such an order is against public interest considering a merger with Sony has been approved by National Company Law Tribunal (NCLT). Senior advocate Darius Khambata, appeared for SEBI and commenced his arguments.
The appellate tribunal however adjourned the case to September 13 and 14 owing to paucity of time.
On August 30, the tribunal 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.
Earlier 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.
First round of litigation at SAT:
In June, the regulator passed an interim order that had said that the Chandra and Goenka were not to hold 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.
Why did SEBI ban Goenka and Chandra?
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 for private financing deals by its founder Chandra.
Zee-Sony merger
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.
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