Sebi order against Goenka quashed
SAT order paves way for Goenka becoming managing director of Zee-Sony merged entity
NEW DELHI: In a relief to Puneet Goenka, the Securities Appellate Tribunal (SAT) has quashed a Sebi order barring him from holding any key managerial position (KMP) in Zee Entertainment Enterprises Ltd (ZEEL) and in the merged entity of ZEEL and Sony Pictures Networks. The order paves the way for Goenka becoming the Managing Director (MD) of the Zee-Sony merged entity.
The appellate tribunal in its order on Monday rejected Securities and Exchange Board of India’s (Sebi’s) argument that if Goenka continued as Managing Director in ZEEL, it would impede or tamper with the investigation into alleged misappropriation of funds. The tribunal also reiterated that allegations of diversion of funds by Puneet Goenka have not been established yet, and that Sebi investigation on these charges could extend beyond the stipulated time. Therefore, it feels it would be harsh and unwarranted to restrain Goenka from holding any positions in ZEEL or the merged entity of ZEEL and Sony Pictures.
The tribunal also noted that 99.97% of the shareholders of ZEEL had reposed complete faith in Puneet Goenka as recent as 2022 to continue as Managing Director and Chief Executive Officer of the merged entity between ZEEL and Sony. In its 14 August 2023 order, the SEBI had barred Goenka from becoming the Managing Director at the merged entity of Zee Entertainment Enterprises Ltd (ZEEL) and Sony Pictures Networks India.
The order also barred Goenka and his father Subash Chandra 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). The case pertains to allegations made by three independent directors of ZEEL that promoters Subash Chandra and Puneet Goenka facilitated diversion of Rs 200 crore from the company to seven related entities. Sebi in its order on 14 August had said that it would investigate the allegations, but continuation of two at key managerial positions may impede the investigation.
However, the appellate tribunal in its Monday order argued that the entire investigation is based on bank account statements which cannot be tampered with by the appellant (Puneet Goenka) and therefore, the question of impeding in the investigation does not arise.
Comments are closed.