Sebi’s Order Barring Zee Entertainment Promoter Punit Goenka Quashed

Sebi's Order Barring Zee Entertainment Promoter Punit Goenka Quashed

VoM News Desk | October 30, 2023 | 11:00 PM IST | Breaking News | Follow on Google News

Sebi’s Order Barring Zee Entertainment Promoter Punit Goenka Quashed

Sebi’s Order Barring Zee Entertainment Promoter Punit Goenka Quashed

In a significant development, the Securities Appellate Tribunal has overturned Sebi’s order that prohibited Zee Entertainment Enterprises’ promoter Punit Goenka from holding key managerial positions in the company and other group firms. The tribunal has also directed Punit Goenka to cooperate with Sebi’s ongoing investigation.

Prima Facie Observation and Cooperation Required

If any material surfaces against Punit Goenka during the investigation, Sebi can take appropriate action in accordance with the law. Any observations made in this order are only prima facie and will not influence the investigation, nor will they be utilized by either of the parties.

Delays and Unwarranted Actions Criticized

The tribunal highlighted the delay in issuing the ad interim order and the alleged transaction dating back to 2019. According to the appellate tribunal, there was no real urgency in passing the ad interim order at this late stage, making the impugned order “harsh and unwarranted.”

Shareholders’ Trust and Merger Approval

It was also noted that ZEEL shareholders had shown confidence in Punit Goenka to continue as MD and CEO of the merged entity between Zee Entertainment and Sony. The NCLT had approved the scheme of amalgamation with Punit Goenka as MD. The tribunal found that Sebi’s approach was unwarranted, and there was no evidence of Punit Goenka exercising positive control over the borrowed entities.

Background on the Case

In June this year, Sebi barred Subhash Chandra and Punit Goenka from holding the position of a director or key managerial personnel in any listed company, alleging siphoning of funds from Zee Entertainment and other listed companies of the Essel Group for their benefit. Sebi claimed that Subhash Chandra and Punit Goenka had used 13 entities as pass-through entities in a well-planned scheme.

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