The Securities Appellate Tribunal (SAT) has expressed dissatisfaction with the recent confirmatory order by the Securities and Exchange Board of India (SEBI) concerning Punit Goenka. The order barred the former MD CEO of the group from holding any key managerial roles within Zee group companies.
Justice Tarun Agarwala, leading the bench said they found the challenged order disagreeable and that eight months to come to a conclusion is too long a period.
According to him, the matter cannot go on indefinitely because there is public interest involved and the merger in question is approved by shareholders.
While, regulatory bodies like SEBI are essential in order to maintain corporate governance and transparency, sometimes the public interest also has to be kept in mind, said experts.
“The recent decision by SEBI regarding Punit Goenka’s role in Zee Group has raised many opinions and concerns within the ambit of financial community. The decision by SEBI with regard to rejection of notices to managerial post is against the public interest. Despite the court statements regarding violation of public money by Goenka, we hope for a resolution that not only addresses these concerns but also upholds the principles of fairness and accountability in corporate affairs,” said Anushkaa Arora, principal and founder, ABA Law Office.
The August 30 SAT order directed SEBI to file a reply in the matter by 4 September and a rejoinder by Punit Goenka on 7 September. The matter will then be heard for final disposal on 8 September.
On August 14, days after the NCLT (National Company Law Tribunal)’s approved the Zee-Sony merger, SEBI (Securities and Exchange Board of India) issued an order preventing Zee promoters Punit Goenka and Subhash Chandra from assuming any significant management roles within Zee companies or the newly merged entity with Sony. The investigation in the matter by SEBI they said would be completed within a period of 8 months.
Talking about Punit Goenka’s role in the new company, the order had said, “That very role in ZEEL is under question and therefore, till the final outcome of the proceedings in the instant matter, it would be appropriate that he is not part of the management of ZEEL or any corporate avatar of it.”
As per the August 14 order, Goenka and Chandra was barred from holding a position of a director or a KMP (Key Management Personnel) in the following companies till further directions: Zee Entertainment Enterprises Ltd, Zee Media Corporation Ltd, Zee Studios Ltd. (wholly owned subsidiary of Zee Entertainment Enterprises Ltd.); Zee Akaash News Pvt Ltd (wholly owned subsidiary of Zee Media Corporation Ltd.); any resultant company that is formed pursuant to a merger or amalgamation of the above named companies with any other company, wholly or in part or any company, which is formed pursuant to demerger of any of the above named companies.
The matter concerns Chandra and Goenka misusing their roles as directors or KMPs in a listed company to divert Rs 200 crore for personal gain. SEBI’s interim order in June highlighted their improper asset handling and benefitting associated entities they control.