SAT to hear Subhash Chandra's appeal in fund diversion case tomorrow

The Securities Appellate Tribunal (SAT) will on Thursday hear an appeal filed by Subhash Chandra, chairman of Essel group, against an order passed by the market regulator in the alleged fund diversion matter in Zee Entertainment.

In the same order, issued in August 2023, Chandra’s son Punit Goenka was granted relief by the tribunal.

SAT had set aside Securities and Exchange Board of India (Sebi)’s order barring him from holding key managerial positions in four group firms. Sebi is currently investigating the alleged fund diversion in Zee.  

Meanwhile, the regulatory probe into the father-and-son duo’s alleged financial improprieties has led to much wrangling between Sony and Zee since mid-2023. It made Sony wary of letting Goenka helm the merged entity while Goenka refused to give in as the CEO spot was promised to him in the 2021 merger pact. The standoff ultimately led to Sony scuttling the deal in January. 

Sebi, in an order in August, barred Zee founders — Chandra and Goenka — from holding executive or director positions in any listed firm after finding that they had “abused their position” and siphoned off funds “for their own benefit.” 

Zee appealed Sebi’s order in a higher appellate authority and got a partial reprieve in October which allowed Goenka to hold an executive position while the probe was underway.

The merger would have bolstered Sony by giving it access to Zee’s deep library of content in regional Indian languages while improving Zee’s financial health. Zee’s full-year profit plummeted by 95% in the twelve months to March 31. It reported a profit of Rs 58.54 crore for the quarter ended Dec. 31 but missed analyst estimates.

(With inputs from agencies)