SAT allows appointment of another WTM in Zee case

The Securities Appellate Tribunal (SAT) on Thursday gave nod regarding the appointment of another whole-time director on hearing in the fund diversion case involving Zee promoters, ex-chairman Subhash Chandra and MD & CEO Punit Goenka.

The appellate tribunal has reportedly modified its July 10 order, allowing the capital markets regulator Securities and Exchange Board of India (SEBI) to appoint another whole-time member or an authorised person for the ongoing hearing in the Zee Entertainment case.

As Zee promoters Subhash Chandra and Punit Goenka failed to overturn a SEBI order against them, Zee formed an internal committee on July 17, 2023, to manage its affairs. The company board had said it formed an interim committee of senior executives to run the media & entertainment organisation “smoothly” in the wake of the ongoing hearing in the case against incumbent MD & CEO Punit Goenka.

The decision was taken after on June 12, 2023, Chandra and Goenka were barred by SEBI from taking leadership roles at listed companies, which also sought "urgent action" against the Zee Entertainment promoters in ₹200-cr fund diversion case.

The newly formed committee will work under the board's supervision and will seek its opinion on all crucial matters, Zee stated. In a major setback, the appellate tribunal SAT on July 10, 2023, dismissed an appeal filed by Zee Entertainment's group ex-chairman Subhash Chandra and its chief executive officer Punit Goenka. The matter pertains to a SEBI ban on them from holding board positions in listed companies for a year, in a fund diversion case.

The market regulator, in its reply to SAT, said the promoters indulged in violations as well as multiple "false disclosures" to cover up "wrongdoings". The regular said the promoters failed to submit any evidence to prove they suffered prejudice, and that they were given a personal hearing before SEBI passed the order because it was willing to give a hearing to them.

The case pertains to SEBI's probe after the resignation of two independent directors (Sunil Kumar and Neharika Vohra) of Zee in November 2019 after raising concerns over several issues, including the appropriation of certain fixed deposit (FD) of ZEEL by Yes Bank Ltd (Yes Bank) for squaring off loans of related entities of Essel Group.

Meanwhile, ZEEL shares closed 0.90 points up or 0.38% at ₹237.3 after surging to an intra-day high of ₹242.50, with m-cap touching ₹22,793.13 crore. The entertainment behemoth has seen a 5.45% rise in shares in the past week, while it has seen 33.63% and 8.14% surge in the past month and six months, respectively.