Securities Appellate Tribunal (SAT) on Thursday said it will not pass an interim order today on the Zee Entertainment case. It will hear the matter and make a decision on Monday and has asked SEBI to file a reply in 48 hours.
Essel Group Chairman Subash Chandra and Zee Entertainment Enterprises Limited MD and CEO Punit Goneka had moved the SAT after Securities Exchange Board of India (SEBI) passed an order that restrained them from holding key managerial positions in any listed entities. A senior counsel representing Chandra and Goenka said that no show-cause notice was sent to either of them and the right proceudre hasn't been followed.
The company in an exchange filing said that it was reviewing the order by SEBI and will be taking legal counsel before moving forward.
Why did SEBI ban Chandra and Goenka from holding key positions?
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Sebi on Monday had barred Chandra and Goenka from holding the position of a director or key managerial personnel (KMP) in any listed company as they were involved in diverting company funds to the group's related entities.
The case pertains to Chandra, who was also the chairman of ZEEL during the alleged violation, and Goenka having abused their position as directors or KMPs of a listed company for siphoning off funds for their own benefit.
In its interim order, Sebi noted that Chandra and Goenka 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.
Sebi noted that the share price of ZEEL has come down from a high of close to Rs 600 per share to the current price of less than Rs 200 per share during the period FY 2018-19 to FY 2022-23. This erosion of wealth despite the company being so profitable and generating profit after tax consistently would lead to a conclusion that "all was not well with the company".
