Zee's Subhash Chandra and Punit Goenka misused public funds: SEBI

Capital markets regulator Securities and Exchange Board of India (SEBI) said that Chairman Emeritus Subhash Chandra and Managing Director and CEO Punit Goenka had diverted public funds to private entities. This was in its response to the Securities and Appellate Tribunal (SAT) in the matter of Zee Enterprises

"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," IANS quoted SEBI as saying in its reply to SAT.

Zee Entertainment Enterprises (ZEE) had also written to SEBI saying that "continuous and repetitive" investigations into the same cause of action are unfair to the company and its shareholders and that it may have an effect on the merger process between Zee and Sony.

The Zee-Sony merger, announced in 2021, was expected to conclude by the end of August.

Petition with The Securities Appellate Tribunal

Earlier, Subhash Chandra and Punit Goenka filed a petition with the Securities Appellate Tribunal challenging the SEBI order prohibiting them from serving as directors or other key management positions in any listed firm.

But, SAT refused to stay an interim order of the Securities and Exchange Board of India.

Background of the matter

SEBI barred Subhash Chandra, the chairman of the Essel Group, and his son Punit Goenka, MD and CEO of Zee Entertainment Enterprises (ZEEL), from holding any directorial or senior managerial positions in any listed company.

SEBI's interim order issued late on Monday, was the result of an inquiry that revealed that the two had abused their board seats at Zee, siphoning off funds for their own benefit.