SAT refuses interim relief to Subash Chandra & Punit Goenka against SEBI order

SEBI took action against Chandra and Goenka for alleged mishandling of Zee limited funds which was challenged by the individuals in the tribunal citing the absence of a show cause notice and violation of principal of natural justice.

The Securities Appellate Tribunal (SAT) asked the Securities and Exchange Board of India to file a detailed response yesterday pertaining to the plea filed by Essel Group patriarch Subash Chandra and Zee Entertainment’s Punit Goenka. The response time ordered by the tribunal to SEBI is 48 hours which is due to end tomorrow.

The Exchange Board in its order on Monday restrained Mr Chandra and Mr Goenka to hold any key managerial position in any listed firms under Essel Group and Zee Entertainment. The action was taken following a series of allegations that both individuals were involved in siphoning off funds.

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After hearing both sides of the argument, the tribunal in an oral order posted the matter to a final decision on Monday. The SAT bench was led by Justice Tarun Agrawala.

In the hearing Justice Agrawala said, “We are of the opinion that passing an interim order at this stage will be virtually allowing the appeal. Consequently, we are of the opinion that we will decide the appeal finally, in this regard parties have agreed that they will file the replies at the earliest. Let replies be filed within 48 hours (2 days).”

Janak Dwarakadas, a senior counsel representing Punit Goenka has termed the SEBI order as “Sham” and believes he will be able to overturn the order with strong arguments. He also addressed the concern of a potential damages to the reputation of his client that have been caused post this case.

The senior counsel has also during the hearing informed the tribunal of the Sony-Zee merger and around 96% of the shareholders have agreed to it but due to the ongoing case on Goenka, the deal can fall into scrutiny.

Senior counsel Somsekharan Sudaresan appearing for Subash Chandra trashed the allegations stating that the Chandra family only holds 3.99% shares at Zee and Mr Chandra do not hold any key managerial positions in the affairs of Zee Entertainment.