MUMBAI: The Securities Appellate Tribunal (SAT) on Thursday refused to stay an interim order of the Securities and Exchange Board of India (Sebi), which barred Subhash Chandra and his son Punit Goenka from holding directorial positions in any listed company.
A bench consisting of Justice Tarun Agarwala and presiding officer Meera Swarup asked the Sebi to file its response within 48 hours and posted the case for a final hearing on June 19. Punit Goenka filed an appeal against the Sebi order banning him and Essel Group chairman Subhash Chandra from holding any directorial or key management position. As per the plea, there was no show cause notice issued to them and the principles of natural justice were not followed before Sebi issued its order.
“We are of the opinion that passing an interim order at this stage would be virtually allowing the appeal,” said the SAT bench. The market regulatory, in its interim order on Monday, barred Subhash Chandra and Punit Goenka from holding any key managerial position in any of its listed companies or subsidiaries for abusing their positions in the company and siphoning off funds for their own benefit.
Arguing for Goenka before the SAT, senior advocate Janak Dwarkadas, expressed concerns about Punit Goenka’s reputation getting tarnished. He stated that the Sebi order is a sham and he can demolish the order with strong points. He emphasised that Punit Goenka has been the MD and CEO of ZEEL since 2008 and enjoys shareholder confidence. The SAT will now hear the case on Monday and take a decision.
Sebi’s order will also affect the planned merger of Zee Entertainment with Sony Pictures Networks India.
The National Company Law Tribunal (NCLT) will hear an application for the Zee-Sony merger on Friday. According to sources, ZEEL may make a plea to NCLT for deferment of hearing on the merger. As per the terms of the merger agreement, Goenka is supposed to be the managing director of the merged entity but the recent order by Sebi has barred him to hold any key post.