ZEE's Subhash Chandra, Punit Goenka move SAT a day after Sebi imposes ban on them

Zee Entertainment's Subhash Chandra and Punit Goenka on Tuesday moved Securities Appellate Tribunal a day after Sebi banned them from holding directorial position for siphoning off ZEEL funds. The bench has posted the matter for further hearing on Thursday, Reuters reported quoting sources.

Markets regulator Sebi on Monday barred Essel Group chairman Subhash Chandra and Zee Entertainment Enterprises Ltd (ZEEL) MD and CEO Punit Goenka from holding the position of a director or key managerial personnel in any listed company for siphoning off funds of the media firm.

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.

The siphoning of funds appears to be a well-planned scheme since, in some instances, the layering of transactions involved using as many as 13 entities as pass-through entities within a short period of two days only, it added.

“The Board of Directors of ZEEL has noted the interim ex-parte order issued by the Securities and Exchange Board of India (SEBI), with respect to Subhash Chandra and Punit Goenka. The Board is currently in the process of reviewing the detailed order, and appropriate legal advice is being sought in order to take the next steps as required.

"With a singular focus on enhancing the shareholder value year after year, the Board of the Company has continued to guide the management towards its strategic goals and priorities for the future. All the appropriate steps will be actioned as necessary, in order to ensure that the interest of the Company and all its valuable shareholders is kept at the forefront," said R Gopalan, Chairman, Zee Entertainment Enterprises Ltd on Tuesday.

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''.

During this period, the promoter shareholding dropped from 41.62 per cent to the current level of 3.99 per cent.

Although the promoter family is only holding 3.99 per cent shares in ZEEL, Chandra and Goenka continue to be at the helm of affairs of ZEEL, the order noted.