Essel Group Chairman Subhash Chandra and Zee Entertainment Enterprises MD and CEO Punit Goenka have appealed to the Securities Appellate Tribunal ie SAT, in which SEBI has directed both to step down as directors from the companies. Reuters quoted sources as saying that Chandra and Goenka have appealed against the market regulator's order and SAT has fixed June 15 for further hearing in the matter.
SEBI, in its recent order, has banned Chandra and Goenka from continuing as directors in any listed company or its subsidiaries till further orders. The capital market regulator found that Subhash Chandra and Punit Goenka siphoned off funds from their listed entity G Ltd for their own benefit.
What was the order of SEBI
SEBI said in its order that after looking at all the facts, it is found that both Subhash Chandra and Punit Goenka have misused their positions. Both have divested the assets of Zee Limited and other listed companies of Essel Group for the benefit of associate entities under their control. It was said in the order that fund transfers also seem to have been done under complete planning. The whole matter looks suspicious.
The special thing is that the promoter family has only 3.99 percent shareholding. SEBI has given 21 days time to both Chandra and Goenka to file their reply or objection in the matter. Zee Chairman R Gopalan said in a statement that the company's board is reviewing the Sebi order and the company is taking "appropriate" legal advice before taking its next step.
Company stock decline
Shares of Zee Ltd fell over 6 per cent in early trade on Tuesday amid concerns over a possible delay in its merger with Sony following the Sebi order as Goenka became the managing director and chief executive of the merged entity. . However, the stock recovered from the lower level till the market closed. ZEEL shares fell 0.56 per cent to close at Rs 193.75.
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