SAT's decision to lift Sebi bar on Chandra and Goenka from holding key positions a boost for Zee
Relates to Sebi interim order against duo for diverting money to private entities
- Oct 30, 2023,
- Updated Oct 30, 2023 2:47 PM IST
The decision of the Securities Appellate Tribunal (SAT) to set aside an interim order by Sebi (Securities and Exchange Board of India) against Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEEL), from holding any key managerial position is a shot in the arm for the company.
In June, Sebi had barred Subhash Chandra, Essel Group’s Chairman, and his son Goenka from holding key managerial positions in ZEEL or any other listed firm. ZEEL is in the middle of a mega merger with Culver Max Entertainment (Sony Pictures Networks India), which will give it a significant presence across genres, most notably Hindi entertainment, sports plus a big play in the regional markets. It was announced earlier that Goenka would head this new entity.
According to Ashish Kumar Singh, Managing Partner, Capstone Legal, the current development is a setback for Sebi. “SAT has set it aside and it is clear that on a prima facie basis nothing has been found,” he said. The issue relates to the interim order issued by Sebi accusing Chandra and Goenka of having diverted money to private entities. That related to events of 2019 and Singh believes that the delay must have played a role in today’s decision.
From Sebi’s point of view, it may still go ahead and conclude the investigation. “If something does emerge from there, the issue can be raised again. At that point, a fresh order will need to be passed and the ZEEL promoters can still contest it,” said another lawyer tracking the issue. Singh said today’s decision points towards the interim order not being sustainable.
Last month, Culver Max Entertainment had said the merger with Zee is delayed. “Although the transaction was previously expected to close by the end of the first half of the fiscal year ending on March 31, 2024, based on the latest progress, it is currently expected to close in the months ahead,” the company said. The approval from the National Company Law Tribunal (NCLT) has already come through.
Also Read: SAT sets aside SEBI's order against Zee's Punit Goenka, allowed to retain key managerial position
The decision of the Securities Appellate Tribunal (SAT) to set aside an interim order by Sebi (Securities and Exchange Board of India) against Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEEL), from holding any key managerial position is a shot in the arm for the company.
In June, Sebi had barred Subhash Chandra, Essel Group’s Chairman, and his son Goenka from holding key managerial positions in ZEEL or any other listed firm. ZEEL is in the middle of a mega merger with Culver Max Entertainment (Sony Pictures Networks India), which will give it a significant presence across genres, most notably Hindi entertainment, sports plus a big play in the regional markets. It was announced earlier that Goenka would head this new entity.
According to Ashish Kumar Singh, Managing Partner, Capstone Legal, the current development is a setback for Sebi. “SAT has set it aside and it is clear that on a prima facie basis nothing has been found,” he said. The issue relates to the interim order issued by Sebi accusing Chandra and Goenka of having diverted money to private entities. That related to events of 2019 and Singh believes that the delay must have played a role in today’s decision.
From Sebi’s point of view, it may still go ahead and conclude the investigation. “If something does emerge from there, the issue can be raised again. At that point, a fresh order will need to be passed and the ZEEL promoters can still contest it,” said another lawyer tracking the issue. Singh said today’s decision points towards the interim order not being sustainable.
Last month, Culver Max Entertainment had said the merger with Zee is delayed. “Although the transaction was previously expected to close by the end of the first half of the fiscal year ending on March 31, 2024, based on the latest progress, it is currently expected to close in the months ahead,” the company said. The approval from the National Company Law Tribunal (NCLT) has already come through.
Also Read: SAT sets aside SEBI's order against Zee's Punit Goenka, allowed to retain key managerial position