Sebi bars Chandra, son Punit from holding key posts

The Securities and Exchange Board of India (Sebi) on Monday barred Zee Entertainment Enterprises Ltd promoters Subhash Chandra and son Punit Goenka from holding key roles, including board positions and top executive positions, in any publicly traded company. The directions come after the markets regulator found them prima facie guilty of siphoning funds from the listed entity for their personal benefit.

The interim order, while likely to be challenged by the promoters, has come at a time when the company is seeking regulatory approvals for a merger with Sony Pictures Networks India, and such an order, legal experts believe, is a major blow for the company.

An interim order is issued by Sebi when there is prima facie evidence of wrongdoing. Once Sebi concludes the probe, final orders are issued.

“The noticees (Chandra and Goenka) shall cease to hold the position of a director or a Key Managerial Personnel in any listed company or its subsidiaries until further orders," the Sebi order read.

The resignation of two independent directors of Zee — Sunil Kumar and Neharika Vohra — from the board in 2019, citing various concerns, including the appropriation of fixed deposits of Zee by Yes Bank, had prompted Sebi to initiate a probe into the matter.

“The only silver lining for Zee is that the order is interim in nature, and they have the opportunity to file their replies and be heard. Likely they will seek and get an injunction pending a final order."