Sebi on Monday (August 14) modified its order against Subhash Chandra and Punit Goenka, and barred them from holding the post of director or key managerial personnel in at least four Zee group companies as well as in the merged entity of ZEEL and Sony Pictures Networks India till further directions.

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Besides, Goenka has been restrained from becoming the Managing Director at the merged entity of Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India, now known as Culver Max Entertainment. The deal is yet to be complete.

Passing the confirmatory order in connection with the case of alleged siphoning off funds of ZEEL, Sebi Chairperson Madhabi Puri Buch said the investigation by the watchdog in the case "shall be completed in a time-bound manner and in any event, within a period of eight months from the date of this order."

In the interim order passed in June this year, Chandra and Goenka were barred from becoming a director or Key Managerial Personnel (KMP) in any listed company but that direction has been modified now.

The interim order was challenged by the two individuals before the Securities Appellate Tribunal (SAT), which had rejected their pleas.

In the 91-page order on Monday, Buch said the interim order is being modified after considering the material on record, oral and written submissions of the entities.

Till further directions, Chandra and Goenka have been barred from holding the post of director or KMP in ZEEL, Zee Media Corporation Ltd. Zee Studios Ltd (a wholly-owned subsidiary of ZEEL), Zee Akaash News Pvt Ltd. (a wholly-owned subsidiary of Zee Media Corporation Ltd).

Besides, they have been restrained from holding the positions in any resultant company that is formed pursuant to a merger or amalgamation of the above named companies with any other company, wholly or in part.

Also, they are barred from being a director or KMP in ”any company, which is formed pursuant to demerger of any of the above named companies”, the order said.

Sebi noted that post-merger, Goenka would be appointed as Managing Director of the merged company. The same means that he would be entrusted with substantial powers of management of the affairs of the merged company.

"That very role in ZEEL is under question and therefore, till the final outcome of the proceedings in the instant matter, it would be appropriate that he is not part of the management of ZEEL or any corporate avatar of it," Buch said in the order.

"A detailed investigation in the matter is in progress which may bring out additional acts of omission or commission, of the entities, if any, in detail, depending on the material and after considering the facts and veracity of their submissions. The findings in the extant order are prima facie findings in a matter under investigation," she added.

The case pertains to Chandra and Goenka having abused their position as directors or KMPs of a listed company for siphoning off funds for their own benefit.

They 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 mentioned in the interim order.

On August 10, the National Company Law Tribunal (NCLT) approved the merger of ZEEL and Culver Max Entertainment.