Essel Group Chairman Subhash Chandra and Zee Entertainment MD and CEO Punit Goenka on Tuesday moved Securities Appellate Tribunal (SAT) a day after SEBI banned them from holding key managerial positions for siphoning off ZEEL funds.
Chandra and Goenka have appealed against SEBI’s order on the principle of natural justice. The SAT bench has scheduled the matter for a further hearing on Thursday, reported Reuters.
The market regulator found that Subhash Chandra, who was the chairman of ZEEL during the alleged violation, and Goenka abused their position as directors or KMPs of a listed company by siphoning off funds for their own benefit.
In its interim order, SEBI observed that Chandra and Goenka alienated the assets of ZEEL and other listed entities of Essel Group for the benefit of associate companies, which are owned and controlled by them.
It added that the siphoning of funds seems to be a well-planned scheme since, in some cases, the layering of transactions involved using as many as 13 companies as pass-through entities within a short period of two days only.
SEBI allowed them 21 days to file their response or objections if any in the case. It also asked Zee Entertainment to place this direction before its board within 7 days from the date of issue.
The company’s board is reviewing the SEBI order and seeking appropriate legal advice before its next move, Zee Chairman R Gopalan said in a statement.
ZEEL share price slumped over 6% in the early trade on Tuesday amid concerns over a potential delay of its merger with Sony after SEBI’s order Goenka is scheduled to become the MD and chief executive officer of the merged entity. However, the stock recovered the losses and ended 0.44 % down at Rs 194 on the BSE.