SAT denies Subhash Chandra and Punit Goenka a temporary relief
The Securities Appellate Tribunal (SAT) declined Subhash Chandra and his son Punit Goenka any temporary relief in response to the Securities & Exchange Board of India (SEBI) judgment.
Subhash Chandra and Goenka, the Zee Entertainment Enterprises (ZEEL) proprietors, have contested the interim ruling of the market regulator prohibiting them from having directorships or important managerial roles in publicly traded companies.
The petitioners Goenka and Chandra were given two weeks to contact SEBI with their response by the bench, which was presided over by judicial member Tarun Agarwala and technical member Meera Swarup. SAT has asked SEBI to issue its decision within a week. The petitioners are likely to appeal the decision in the Supreme Court.
On June 13, the father-and-son duo went to SAT to contest an interim orderthat the SEBI had issued on 12th June. Senior Counsel Darius Khambata, representing SEBI, stated that the regulator has discovered several transactions where related parties were involved, and such transactions are undeniable.
Senior advocate Janak Dwarkadas, Goenka’s attorney, had previously stated that the only supporting documentation SEBI had was bank statements. Additionally, he claimed that there is no basis for the market regulator’s determination that the fund repayments by Essel Group firms to ZEEL are merely book entries and fraudulent.
Chandra and his son Goenka maintained that they had not received a show-cause notice from the market regulator before the ruling was made. They further claimed that SEBI did not issue the order under the rules of natural justice.
The market regulator has alleged that they had exploited their board seats at ZEEL by “siphoning off funds for their benefit” and gave them 21 days to respond to its interim decision. The order also instructed ZEEL to provide it to its board of directors within seven days.
The merger, which would result in the formation of a $10 billion media conglomerate with a strong presence across TV, digital, films, and music, has also received the support of ZEEL shareholders. With the ZEEL promoters receiving a 3.99% interest, SPNI’s parent firm, Sony Pictures Entertainment, will indirectly own 50.86% of the combined business. 45.15% of the company will be owned by other ZEEL stockholders.
