The Securities Appellate Tribunal (SAT) on Wednesday said that it is ‘not satisfied’ with the Securities and Exchange Board of India’s (SEBI’s) recent confirmatory order against Zee’s former MD CEO, Punit Goenka, that barred him from holding any key managerial position in Zee group companies.
SEBI’s confirmatory order from August 14 has essentially barred Punit Goenka, along with his father Subhash Chandra, from holding any key position in Zee or any of its subsidiaries, while SEBI completes its investigation. SEBI has given itself eight months time to complete the said investigation, arguing that if Goenka continued to remain at Zee, the investigation would not be free and fair as he could exert undue influence.
Following this, Punit Goenka filed an appeal with the SAT, contesting SEBI’s confirmatory order. A Bench led by Justice Tarun Agarwala said, “We don’t agree with the impugned order. We are not satisfied with eight months. This can’t go on indefinitely. The merger has happened with the consensus of the shareholders. There is public interest involved. If the public says that he should be the director, then it does have a bearing.”
The Bench asked the regulator to file a reply in the matter by September 4 and a rejoinder thereafter by Goenka by September 7. The final hearing on the matter will be on September 8.
‘premature’ order
Abhishek Manu Singhvi, who is representing Goenka, called SEBI’s confirmatory order “premature,” especially as the regulator has barred Goenka from Zee before arriving on its final decision. According to Singhvi, Goenka cannot harm the shareholders in the Merged Co., given that the entity will be under the control of Sony.
Regardless of Goenka’s troubles with SEBI, the NCLT cleared the merger between Zee and Sony. The merger is now expected to happen by mid November and if SEBI’s confirmatory order holds, then Punit Goenka will not be heading the merged co. – which was a key term for the merger. Goenka’s troubles with SEBI started on June 12, when SEBI restrained Goenka and Chandra from key positions in Zee on a funds diversion case.