The Securities Appellate Tribunal (SAT) on Monday declined to take on record an additional affidavit filed by the Securities and Exchange Board of India (Sebi), saying it would continue to hear on Tuesday the matter pertaining to the capital market regulator’s directive banning Essel Group chairman Subhash Chandra and Zee Entertainment Enterprises MD and CEO Punit Goenka from holding directorial or key managerial positions in any listed entity. The affidavit was filed on Sunday night by the Sebi.
Arguments failed to conclude on Monday as the counsel appearing for Sebi raised questions regarding the money trail and how a network of firms were used by promoters of Zee to divert funds from the company. This is the third time that the matter has been deferred, even as both sides show no signs of backing down.
Zee is currently seeking approvals for its merger with Sony, which has been delayed for some time now. The merger, which will create a $10-billion company, was deferred by the National Company Law Tribunal (NCLT) on Monday to July 6. This is the second time the NCLT has deferred the matter after first pushing the case from June 16 to June 26.
Sebi was probing a case triggered in the wake of the resignations of two independent directors, Sunil Kumar and Neharika Vohra, who had raised concerns that a ‘letter of comfort’ or LoC had been signed by Chandra for a fixed deposit of Rs 200 crore to Yes Bank. This was known only to a few individuals in the management, and even the board was not aware of it, the two had said.
A day before the Sebi’s June 12 order, Zee had written to the capital markets regulator saying it was a victim of misappropriation by Yes Bank, where the lender had adjusted the fixed deposit of Rs 200 crore against certain receivables of the media company’s borrower entities. It also said that it was never privy to loan arrangements between the borrower entities and Yes Bank, and that the lender had acted unilaterally without any action on the part of Zee.