The Securities Appellate Tribunal (SAT) on July 10 refused to stay market regulator’s order 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.

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The tribunal had on June 27 reserved its order after hearing Goenka’s plea challenging the Securities and Exchange Board of India’s (SEBI) interim order.

The Securities Appellate Tribunal while refusing to vacate the regulator's directions said that it does not see merit in interfering in the regulator's order and also asked the duo to defend themselves before SEBI.

SEBI took action against Chandra and Goenka on on June 12 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.

During the hearing last month, ZEE had argued 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.

Goenka's counsel also said that the aforementioned amount was returned back by borrowing entities to ZEEL. The company also informed the same in 2019 through a corporate announcement.

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.

Goenka and Chandra have been directed by SAT to file a reply with SEBI in two weeks.

Following the SAT order, Zee shares were trading over three percent lower at Rs 200.15 on BSE at 11: 48 am.

First Published:Jul 10, 2023 11:37 AM IST