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Zee's Subhash Chandra and Punit Goenka move SAT challenging SEBI ban

The bench has posted the matter for further hearing on Thursday

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Zee's Subhash Chandra and Punit Goenka move SAT challenging SEBI ban

Essel Group Chairman Subhash Chandra and Zee Entertainment Enterprises’ (ZEEL) MD and CEO Punit Goenka have moved the Securities Appellate Tribunal (SAT) against the SEBI order that banned them from holding directorial positions for siphoning off ZEEL funds. 

The bench has posted the matter for further hearing on Thursday, according to media reports. 

Following SEBI’s order, the Board of Directors of ZEEL had said that all the appropriate steps will be actioned as necessary, in order to ensure that the interest of the company and all its shareholders is kept at the forefront.

The case pertains to Chandra, who was also the chairman of ZEEL during the alleged violation, and Goenka having abused their position as directors or KMPs of a listed company for siphoning off funds for their own benefit.

In its interim order, SEBI noted that Chandra and Goenka 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.

The siphoning of funds appears to be a well-planned scheme since, in some instances, the layering of transactions involved using as many as 13 pass-through entities within two days only, it added.

In its order, SEBI stated, “Noticees (Chandra and Goneka) created a façade through sham entries to misrepresent to the investors as well as the regulator that money had been returned by associate entities, whereas in reality, it was ZEEL's own funds which were rotated through multiple layers to end in ZEEL's account finally.”

“The noticees have attempted to piggyback on the success of ZEEL, the flagship company of Essel Group, to bankroll the associate entities, which are owned and controlled by them," SEBI said in its 17-page order.

The order came after SEBI conducted an examination in the wake of the resignation of two independent directors -- Sunil Kumar and Neharika Vohra -- of ZEEL in November 2019.

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ZEEL Punit Goenka Zee SEBI Subhash Chandra SAT SEBI order
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