Zee Entertainment Enterprises (Zee) and its chief executive officer Punit Goenka have sought relief from the Securities Appellate Tribunal (SAT) against an order by market regulator Securities and Exchange Board of India (Sebi), which restrained them from accessing the securities market.
The counsel appearing for the media firm and the promoter on Monday sought urgent intervention and an immediate hearing against the July 31 order of the market regulator over alleged fraudulent activity.
The tribunal has scheduled the matter for hearing on Wednesday, August 12.
The market regulator has barred Goenka for 12 months, while Zee was restrained from accessing the securities market for two months. Sebi had also imposed a penalty of ₹58 lakh on Goenka and ₹30 lakh on Zee. Meanwhile, promoter Subhash Chandra has also been barred for 12 months, along with a penalty of ₹60 lakh.
The matter pertains to the use of certain land assets of Zee in Hyderabad as security for loans availed of by four entities of the Essel Group. The entities had availed of four separate loans aggregating to ₹726 crore from Indiabulls Housing Finance (IHFL).
The order notes that in December 2018, Chandra executed a Declaration and Acknowledgement (D&A) in favour of IHFL on behalf of Zee.
The regulator alleged that the benefit arising from the deployment of Zee’s property flowed to entities allegedly controlled by Goenka and Chandra, and their family members.
While the D&A contained a declaration that Zee had obtained all permissions and approvals from authorities for creating the first-ranking mortgage and that Zee possessed the necessary power to secure the dues of the borrowing entities, Sebi’s investigation showed that there was no prior approval from the audit committee, the board of directors or the shareholders of Zee for the same.
“The borrowing entities were also not disclosed as related parties, and the use of the Hyderabad land for securing their loans was not disclosed as a related-party transaction in ZEEL’s financial statements,” notes the order.
