The Securities Appellate Tribunal (SAT) on Tuesday reserved its order in an appeal by Essel group chairman emeritus Subhash Chandra and Zee Entertainment Enterprises (ZEEL) Managing Director and Chief Executive Officer (MD & CEO) Punit Goenka in the fund diversion case.
The Securities and Exchange Board of India (Sebi) had barred the ZEEL promoters from taking any key managerial position or director role in an ex-parte interim order issued on June 12.
During Tuesday’s arguments, Sebi's counsel presented that the material gathered by the market in the past four months indicated alleged siphoning off of funds and showed further investigations were already underway.
“Keeping in view the gravity of the matter, Sebi was not unjustified in evoking such extraordinary charges,” he added.
The counsel said that ZEEL had not presented any response or justification of the allegation of related parties circulating money.
The counsel representing Goenka argued that while Sebi had issued the interim order against them, no direction had been issued against Yes Bank for appropriating the Rs 200 crore fixed deposit without ZEEL’s approval.
He added that the information about the Rs 200 crore fixed deposits was in public domain and the bank statements for the transfers have been sought by Sebi only after several years of the transactions.
He argued that the investigations have not found any active irregularity about the role of the promoter or proof that the transactions are bogus. He reiterated that they had not been provided with an opportunity for personal hearing before the issuance of the interim order.
Earlier on Monday, the tribunal had refused to take on record the additional affidavit submitted by Sebi in the matter after objection from ZEEL promoters.
The tribunal is expected to soon pronounce its verdict on whether the bar on Chandra and Goenka from holding key positions at listed firms can be lifted till the regulator passes a final order in the matter.
The development could be key for the merger between the two media behemoths ZEEL and Sony Pictures Network India. The National Company Law Tribunal (NCLT) will next hear the matter pertaining to the merger on July 6.