Punit Goenka, on Monday, hit back at the Securities and Exchange Board of India (SEBI) with his lawyers telling the Securities Appellate Tribunal (SAT) that SEBI passed an interim order in the matter related to Zee Entertainment without conducting a proper investigation.

Senior Advocate Janak Dwarkadas, appearing on behalf of Goenka said SEBI has reached its conclusions with incomplete evidence. “In May, SEBI wrote emails to banks asking for details. As a result, SEBI obtained just bank statements of the group companies. It was from the bank statement ascertained that the monies in fact originated from Zee Entertainment Enterprises Ltd (ZEEL) or other listed companies. How do you come to this conclusion from a bank statement? There is no other material in 197 pages,” he argued.

SEBI had passed an order ousting Goenka and his father Subhash Chandra from holding any managerial position in ZEEL or any of its subsidiaries after it found that about ₹200 crore claimed to have been repaid to ZEEL by seven entities linked to the Essel group originated from ZEEL or other listed companies within the Essel Group. Therefore, effectively, ZEEL funded its own repayment.

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Non bona fide repayments

 Given that the seven Essel Group entities allegedly made “non bona fide” repayments to ZEEL in 2019, Goenka’s lawyers are asking why did the market regulator wait nearly four years to take action on the matter. 

On the contrary, SEBI’s scrutiny in this matter came as a result of an investigation into another one of the Essel Group entities — Shirpur Gold Refineries, earlier this year.

“An analysis of the transactions by SEBI found that the transfers occurred between the conduit (middlemen) entities on the same date or consecutive days in a sequential fashion and at very quick intervals (within seconds and minutes), indicating that these transactions are not bona fide in nature,” the market regulator had said to Goenka’s appeal order with SAT. 

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However Goenka’s lawyers counter that SEBI has reached its conclusions with incomplete evidence. Goenka’s lawyers have also argued in the affidavits that the “bogus book entries” by Zee are related to commercial dealing, payments for movie rights and other such transactions. 

The lawyers argued that SEBI passed its order too soon, without completing its investigations.