SAT Scraps SEBI Order Barring Zee's Punit Goenka from Key Directorships

The Securities Appellate Tribunal (SAT) on Monday scrapped markets regulator SEBI”s August 14 order that barred Punit Goenka of Zee Entertainment Enterprises from assuming key directorships in listed entities over an alleged fund-diversion case. This will facilitate Zee, which is on the verge of merging with Sony, to reinstate Goenka as managing director and CEO.

Goenka had to resign from the posts of CEO and managing director of Zee, one of the largest media conglomerates in India, following SEBI”s order barring him from holding key positions in a listed entity. However, in the new order, the tribunal has allowed SEBI to continue its ongoing investigation.

According to reports, SEBI is expected to appeal against the tribunal”s order before the Supreme Court.

The SAT bench, led by Justice Tarun Agarwala, said, “In view of the aforesaid, the SEBI order cannot be sustained and is quashed. The confirmatory order passed by SEBI on August 14 is set aside. The appeal is allowed. The appellants will, however, cooperate in the ongoing investigation.”

According to a report by Best Media Info, on August 14, 2023, Madhabi Puri Buch, the chief of the Securities and Exchange Board of India (SEBI), passed an order that barred Punit Goenka and his father, Subhash Chandra, from holding key positions in publicly traded companies until further notice.

The report alleged that Punit Goenka and Subhash Chandra were involved in schemes and transactions through which vast amounts of public money from Zee Entertainment Enterprises Ltd were diverted to private entities owned and controlled by them.

Buch clarified that the duo would not be allowed to hold key positions in any entity formed from the merger of Zee”s Culver Max Entertainment with Sony Pictures Networks India, wholly or in part. In August 2023, SEBI asked its officials to complete the investigation within eight months.

However, the Securities Appellate Tribunal (SAT) strongly criticized SEBI for the time it has taken to investigate the case.