Sebi bars Punit Goenka from holding key posts in Zee-Sony merged entity

Within the confirmatory order issued in opposition to Zee Leisure Enterprises’ (ZEEL) promoters Subhash Chandra and Punit Goenka, the markets regulator has stated it’s going to full the investigation within the matter inside eight months within the alleged fund diversion case.

Nevertheless, the Securities and Change Board of India (Sebi) has barred the father-son duo from holding a directorship or key managerial positions in Zee Leisure, Zee Media Company, Zee Studios, Zee Akaash Information and another firm fashioned as a merger or demerger of those entities.

The order, issued by Sebi chairperson Madhabi Puri Buch, comes amid the approval by Nationwide Firm Legislation Tribunal (NCLT) for the merger with Sony Footage Community.

In keeping with Sebi’s order, Goenka will stay barred from holding key positions within the merged entity too.

“His (Goenka) actions were in direct conflict with the interests of 96 per cent public shareholders of ZEEL, necessitating imposition of temporary restraint on him,” stated Sebi.

Sebi identified that Goenka’s appointment as managing director of the merged firm means he can be entrusted with substantial powers of the administration.

As that very function in Zee is underneath query, subsequently, until the ultimate consequence of the proceedings, it might be acceptable for him to not be part of the administration in any ‘corproate avatar’of Zee.

Countering the arguments of Zee promoters, Sebi in its 91-page order, has famous, “It was during his tenure in ZEEL as MD and CEO that the financials of ZEEL were misrepresented and false announcements were made to the stock exchanges.”

Nevertheless, Sebi’s earlier interim order had barred them from holding key positions in any listed firm, which has been modified to solely 4 Zee group corporations.

The matter pertains to a letter of consolation (LoC) granted for Rs. 200 crore by Essel group chairman emeritus Chandra for appropriation of a hard and fast deposit held with YES Financial institution.

On arguments from Chandra’s representatives that he doesn’t maintain any key place in Zee, Buch has identified that the foundation reason for the ‘entire scheme, which has, prima facie, been orchestrated’ is the LoC issued by him.

“…it is not disputed that he (Chandra) is a part of the promoter group and has a long-standing influence on the companies belonging to the Essel Group, and therefore, nothing precludes him from seeking re-appointment on the board of ZEEL in accordance with the Companies Law. Accordingly, the possibility of him impacting fair and transparent investigation, should he be so appointed, cannot be ruled out,” famous Sebi.

The markets regulator was directed by the Securities Appellate Tribunal (SAT) to offer a chance of listening to to Chandra and Goenka and subject the order inside two weeks after the listening to. The tribunal had additionally requested the regulator to nominate an official senior than a whole-time-member (WTM) in order to take away any bias. The 2 WTMs with Sebi proper now had been a part of earlier settlement-related hearings and thus had been thought-about ineligible by the tribunal.

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