ZEE board establishes Interim Committee to oversee operations after Goenka’s suspension by SEBI

Goenka and his father Subhash Chandra were prohibited from having any significant managerial positions in any listed firms by a SEBI decision that was issued on June 12 due to suspicions of fund siphoning.

The board of Zee Entertainment Enterprises Ltd (ZEEL) has established an interim committee made up of senior executives to oversee operations at the company after managing director and chief executive Punit Goenka was unable to obtain relief from the Securities Appellate Tribunal (SAT) against a ruling by the markets regulator that prohibited him from holding any important positions in any listed companies.

“The board examined and discussed all necessary steps in a meeting held on July 14 in light of the interim order issued by the Securities and Exchange Board of India (SEBI) and the decision rendered by the Securities Appellate Tribunal that followed. The board of the company has established an interim committee of senior executives to oversee the company’s smooth operations because the ruling prohibits Punit Goenka from holding the post of director or key managerial position in a listed company, the spokeswoman added.

Advertisement

Punit Goenka, the president of Zee Entertainment, and Subhash Chandra, the chairman of Zee Group, appealed a SEBI judgment that prohibited them from serving on the boards of publicly traded firms, but the SAT rejected their appeal on July 10. According to Mint, Goenka will be forced to resign if there isn’t a stay, barring a special ruling from the Supreme Court.

The spokesperson further stated that the interim committee will be governed by the board and look to it for direction on all issues involving the business. The board will continue to have a great deal of faith in Punit Goenka’s ability to lead in a way that creates value and will keep an eye on how things develop. The Board continues to be convinced that the business will continually produce strong growth and create more value for all shareholders, he added.

For allegedly siphoning off cash, SEBI had prohibited the father-son team from holding any important managerial posts in any listed firms. Additionally, according to SEBI, Chandra and Goenka allegedly utilized their positions for their own financial gain. The pair had moved SAT after becoming irate with the regulator’s decision.

The tribunal instructed the pair to submit their responses to SEBI within two weeks, even though it upheld the SEBI order. Additionally, it had requested from SEBI that the Whole Time Member (WTM) schedule a date for a hearing and make a decision in accordance with that date within a week of the appellants’ submission of a reply. The appropriate orders will be issued by the WTM within two weeks of giving the appellants a chance to be heard.

Chandra, who left his post as chairman of ZEE in November 2019, doesn’t hold any important positions within the business.