Interim committee appointed to oversee Zee operations

As Punit Goenka’s future prospects in Zee Entertainment Enterprises remain on uncertain grounds, the Zee Board has constituted an interim committee of senior executives to conduct the day-to-day operations of the company. Punit Goenka was barred from the position of MD and CEO of Zee as per SEBI’s interim order in July. Punit Goenka along with his father, Subhash Chandra were accused of siphoning funds from the company and were banned from holding any managerial position, or a position in the board of Zee and its subsidiaries.

Meeting on July 14, the Zee board decided to appoint an interim committee to take on Punit Goenka’s role, “Since the order restricts Punit Goenka from holding the position as director or key managerial position in a listed company, the Board of the company has constituted an Interim Committee of senior executives to ensure smooth operations of the company. The Interim Committee will be under the supervision of the Board and will seek its guidance on all matters pertaining to the company,” the Zee spokesperson said in a statement.

Goenka has been contesting the SEBI order with the appellate authorities. According to the latest developments, the Securities Appellate Tribunal (SAT) has refused to stay SEBI’s order to bar the father-son duo from any executive position in the company. 

• Also read: No respite for Goenka, Chandra as SAT rejects appeal against SEBI order

SEBI’s caveat against Goenka

SEBI had, in an interim order, on June 12, stated that Subhash Chandra and Goenka had allegedly “abused their positions” for personal financial gains. It noted that the Mumbai-based media house had faked the recovery of loans to cover private financing deals by its founder Subhash Chandra.

The regulator further alleged that the duo engaged in the alienation of assets belonging to Zee Entertainment and other listed companies of the Essel Group, with the aim of benefiting their associate entities.

In case Goenka appeals the matter in Supreme Court, SEBI on July 12 filed a caveat against Goenka in the Supreme Court in anticipation of an appeal. The caveat notes that Goenka has lost the matter in SAT, that refused to stay its order barring him from holding key management positions in any listed company.

Goenka’s ouster could throw a hurdle into Zee’s merger plans with Sony. As per the merger terms of agreement, Goenka is supposed to lead the Zee-Sony merged entity. So far, the terms of the merger have not been modified to reflect Goenka’s ouster. 

• Also read: SAT dismisses appeal by Zee chairman, CEO over market regulator ban