Sebi's Shirpur Gold Refinery order raised before NCLT, may bite Goenkas

Bourses NSE, BSE brought up the issue during Zee-Sony merger hearing

Stock exchanges NSE and BSE have informed the National Company Law Tribunal (NCLT) about an April-25 order passed by market regulator Securities and Exchange Board of India (Sebi) in the matter of Shirpur Gold Refinery, a Subhash Chandra-led Essel Group firm.

The issue came up when the tribunal was deciding on the proposed merger between two media behemoths, Zee Entertainment Enterprises and Sony Pictures Networks India, which has already been cleared by the bourses.

A counsel representing the exchanges told the tribunal that they have received a notice from Sebi directing them to place on record the order before the court.

On April 25, Sebi barred Chandra’s son, Amit Goenka, and seven others for alleged fraudulent practices and manipulation of financial statements of Shirpur Gold Refinery, a listed firm.

In an interim order, Sebi noted that Shirpur had allegedly created a scheme to divert funds from debtors to promoter group entities.

“It appears that the main reason for Shirpur's defaults to lenders is non- receipt of funds from its debtors amounting to Rs 404 crore. The same appears to be part of a well-designed scheme devised by promoters to move the funds out of Shirpur and transfer to their accounts while misusing the IBC (Insolvency and Bankruptcy Code) process,” noted Sebi whole-time member Ashwani Bhatia in an order giving Goenka and others three weeks to file responses or objections. 

While posting further hearings on the Zee-Sony matter for June 16, the NCLT bench said BSE and NSE should take into consideration Sebi’s order in the Shirpur matter since they have already cleared the merger.