Subhash Chandra, Punit Goenka move SAT against SEBI’s order on the principle of natural justice: Report

Essel Group Chairman Subhash Chandra and Zee Entertainment Enterprises' (ZEEL) MD & CEO Punit Goenka have moved Securities Appellate Tribunal (SAT) against the Securities & Exchange Board of India's (Sebi) order barring them from holding key managerial positions in listed entities, report said.

Chandra and Goenka have appealed against the market regulator's order on the principle of natural justice and SAT posted the matter for further hearing on June 15, Reuters reported quoting sources.

Sebi in its recent order had banned Chandra and Goenka from being directors or holding a Key Managerial Personnel in any listed company or its subsidiaries until further orders.

Read here: Sebi bans Zee promoters Subhash Chandra, Punit Goenka from holding directorial, key managerial roles over fund siphoning

The capital market regulator found that Subhash Chandra and Punit Goenka siphoned off funds for their own benefits from their listed entity ZEEL.

In its order, Sebi observed, “The Noticees 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 entities as pass through entities within a short period of two days only." The associate entity here is Shirpur Gold Refinery.

Sebi gave both, Chandra and Goenka, 21 days of time to file their reply or objections if any in the case. It also asked ZEEL to place this direction before its board within 7 days from the date of receipt.

Zee Chairman R Gopalan said in a statement that the company's board is reviewing the SEBI order and the company is seeking "appropriate" legal advice before its next move.

ZEEL share price plunged over 6% in the early trade on Tuesday amid worries over a potential delay of its merger with Sony after SEBI's order as Goenka is slated to become the managing director and chief executive of the merged entity.

However, the stock recovered from the day's low. At 1:25 pm, the ZEEL shares were trading 1.39% lower at ₹192.15 apiece on the BSE.

Read here: After Sebi order on Subhash Chandra, Punit Goenka, Zee share price falls over 6%