Zee Entertainment Enterprises’ board has replaced MD and CEO Punit Goenka with an interim committee of senior executives to ensure smooth operations, the media and entertainment firm declared on July 17.

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This is over a month after the Securities and Exchange Board of India (SEBI) passed an interim order on June 12 that bars Zee Entertainment Enterprises MD and CEO Punit Goenka and Essel Group chairman Subhash Chandra from holding any key managerial position in any listed company. Though the firm challenged the SEBI order, the Securities Appellate Tribunal (SAT) has refused to stay it.

“Since the order restricts Mr. Punit Goenka from holding the position as director or key managerial position in a listed company, the Board of the Company has constituted an Interim Committee of senior executives to ensure smooth operations of the Company,” a Zee spokesperson said today.

The interim committee will be under the supervision of the Zee’s board and will seek its guidance on all matters pertaining to the company, the spokesperson said. “The board continues to have immense faith in the value-building leadership skills showcased by Mr. Punit Goenka and will monitor the progress of the matter. The Board also remains confident that the Company will deliver robust growth consistently and generate higher value for all shareholders,” the firm’s spokesperson added.

The action comes against the backdrop of market regulator SEBI taking action against Chandra and Goenka alleging that the promoters created a façade through sham entries to misrepresent investors and the regulator about the repayment of Rs 200 crore to ZEEL by seven related parties.

The market regulator claims the Rs 200 crore repaid to Zee by seven borrowing entities actually originated from Zee and that the media firm did not receive any funds and the entries were just book entries.

ZEE, however, argues that SEBI didn't have any evidence beyond bank statements to prove allegations of round-tripping of funds and therefore it cannot pass ex parte order.

Meanwhile, SEBI also alleged that Chandra and Goenka have engaged in the alienation of assets belonging to Zee and other listed companies of the Essel Group, with the aim of benefiting their Associate Entities.

SAT had on July 10 told Goenka and Chandra to file a reply with SEBI in two weeks.

First Published:Jul 17, 2023 3:32 PM IST