SAT directs Sebi to respond to Chandra, Goenka plea in 48 hrs
1 min read 15 Jun 2023, 10:31 PM ISTAccording to an oral order passed by the bench, the matter will be heard for final disposal on 19 June.
PremiumNEW DELHI : The Securities Appellate Tribunal on Thursday directed the Securities and Exchange Board of India to respond within 48 hours to Subhash Chandra’s and Punit Goenka’s plea challenging the regulator’s recent order.
In its 12 June order, Sebi had prohibited the founder and former chairman of Zee Entertainment Enterprises Chandra and its managing director and chief executive Goenka, from assuming managerial or board positions in listed companies, on allegations that the father-son duo had diverted funds of the company for personal use. Aggrieved by the order, Chandra and Goenka flied an appeal with SAT.
The SAT bench, led by Justice Tarun Agarwala and technical member Meera Swarup, refused any interim order saying that doing so would essentially amount to allowing the appeal. “Consequently, we are of the opinion we will decide the appeal finally, (and) in this regard the parties have agreed that they will file the replies at the earliest. Let replies be filed within 48 hours," it said. According to an oral order passed by the bench, the matter will be heard for final disposal on 19 June.
Janak Dwarakadas, senior counsel representing Goenka argued that Sebi’s order is a ‘sham’ and there was no investigation done by the regulator. “I can demolish the order with strong points. We will be able to establish within two minutes that there was no investigation into this case, and that it is a sham," he said.
Even if the ruling were to be stayed, “my client’s reputation can never be restored," he said. Emphasizing the importance of Goenka’s fundamental right as guaranteed by the Constitutionhe said: “If an authority of law thinks that the fundamental rights can be trifled in such a shabby manner, we have a lot to worry about as citizens."
Dwarkadas said Sebi’s order will have a significant impact since Goenka is barred from holding key positions in Zee as well as in any listed entity.
Appearing for Sebi, Darius Khambata said the facts about siphoning off money had just been brought before the markets regulator.
The senior counsel also informed the tribunal regarding the pending approval from the NCLT in the ZEE- Sony merger proceedings. “Sebi’s order will effectively derail the proposed merger between ZEE and Sony", he said, adding that the merger has been approved by 96% of the shareholders of the company.
On the other hand, senior counsel Somasekhar Sundaresan appearing for Chandra, argued that “Chandra currently is not at the helm of the affairs of ZEE and Sebi is wrong in mentioning so in its order. “While also adding that Chandra is neither a director nor any key managerial personnel in any listed company or its subsidiaries. “If I am not a key director what is the need for the direction"?
The order stated that although the promoter family owns only a 3.99% stake in ZEE, Subhash Chandra and Punit Goenka continue to be at the helm of affairs of ZEE.
Hearing both sides briefly, the bench listed the matter for Monday for final order and disposal.