Subhash Chandra and son Punit Goenka will not be able to hold directorships of several group companies including Zee Entertainment Enterprises Ltd., Zee Media, and the entity created by the merger of Zee and Sony, until SEBI completes its investigation in an alleged fund diversion case against them within eight months. The SEBI said this in a 91-page revised order signed by chairperson Madhabi Puri Buch.
Had the SEBI not barred the Zee top men, Punit would’ve headed the merged company in which Sony will hold majority stake.
SEBI has ruled that prima facie it has been found that the father-son duo “actively tried to conceal the very acts which have led to the loss of at least Rs. 144 crore to listed companies including Zee”. The SEBI added, “The conduct of Punit as the MD of Zee has been found to be prima facie in violation of regulations (fraudulent and unfair trade practices and disclosure requirement). His actions were in direct conflict with the interests of 96% public shareholders of Zee, necessitating imposition of temporary restraint on him.”
SEBI had earlier barred the duo from holding directorships of any listed company or key managerial positions therein. The Goenkas submitted that SEBI’s June 12 directive, restraining them from holding directorships or key managerial positions in listed companies or their subsidiaries, was “indefinite in terms of scope and time” and hence the regulator modified the order.
“Balancing the said purpose of ensuring fair and transparent investigation with the impact of the directions on the entities (Goenkas), I find it appropriate to modify the directions,” said Buch.