Mumbai: The Securities Appellate Tribunal has instructed Sebi, the market regulator, to designate a new whole-time member or a higher-grade officer to assess the objections raised by Zee promoters Punit Goenka and Subhash Chandra Goenka against an interim order targeted at them.
The newly appointed whole-time member (WTM) would be responsible for scheduling a hearing within one week of receiving the reply from the Goenkas. Furthermore, within two weeks of the hearing, they must issue appropriate orders, as stated in the order issued by SAT on Thursday.
This directive was issued in response to an application from the Securities and Exchange Board of India (Sebi) on July 24, where they requested the appellate tribunal to modify their July 10 order in order to eliminate any bias. The initial order prohibited two out of three WTMs, Ashwani Bhatia and Ananth Narayan G, from hearing the objections raised by the Goenkas.
Bhatia had issued the order against the promoters of Zee Entertainment Enterprises Ltd (ZEEL) on June 12, preventing them from holding any directorship or managerial position in any listed firm or its subsidiaries due to allegations of fund diversion and round-tripping, until further notice. Narayan was involved in the settlement proceedings pertaining to this case.
The other WTM, Ananta Barua, will be retiring on July 31.
Sebi had sought permission from SAT to appoint Narayan or any authorized officer to address the objections raised by the Goenkas and make further judgments. SAT has rejected Narayan as an option. However, if no WTM is available, Sebi has the authority to designate any authorized officer ranked higher than the WTM to decide the outcome of the matter concerning the Goenkas.
Sumit Agrawal, the founder of Regstreet Law Advisors, suggested that Sebi has various alternative courses of action to deal with this situation. For instance, they could appoint an independent committee, as was done in the NSDL case. Alternatively, they can take the matter to the Supreme Court if necessary.
“A similar delegation occurred in the case of the NSDL Roopalben Panchal IPO, where a committee comprising Mohan Gopal and V Leeladhar was appointed to investigate allegations against NSDL due to potential conflicts arising from the Sebi chairman’s prior role as the NSDL chairman,” he explained.
Agrawal, a former Sebi officer himself, mentioned that the authority to pass orders has been delegated to WTMs or other board members in certain cases, evolving over the past fifteen years.
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Basant Kasayap is an entertainment aficionado who delves into the glitz and glamour of the entertainment industry. From Hollywood to Bollywood to regional cinema, she offers readers an insider’s perspective on the world of movies, music, and pop culture.
