SAT modifies order in ZEEL matter; permits Sebi to appoint authorised officer to decide case

The Securities Appellate Tribunal (SAT) on Thursday modified its earlier order and allowed Sebi to appoint an authorised officer to decide the alleged fund diversion case involving Zee Entertainment Enterprises Ltd’s promoters Punit Goenka and Subhash Chandra.

This was permitted due to a lack of whole-time members (WTM) with the Securities and Exchange Board of India (Sebi). “We direct Sebi to appoint another WTM, and if no WTM is available, then any authorised officer higher in grade or rank or position to the WTM would hear and decide the matter…The person who is appointed shall pass the order within the stipulated period,” SAT said in its order. The order came after the capital markets regulator appealed to SAT to modify the appellate tribunal order passed on July 10 that directed it to appoint another WTM other than the WTM who had passed the order on June 12 in the ZEEL (Zee Entertainment Enterprises Ltd) case. This was done to remove bias.

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Sebi, in its appeal, stated that there is no WTM at present to hear and decide the matter. At present, there are three WTMs — Ananta Barua, Ananth Narayan G and Ashwani Bhatia. Bhatia is the WTM who passed the impugned order. Ananta Barua is going to retire on July 31, 2023, and therefore, is not in a position to hear and pass an appropriate order before his retirement, Sebi said. “Ananth Narayan G could have been appointed to hear the matter, but we find that Ananth Narayan G was also part of the settlement proceedings and, therefore, in terms of paragraph nos 36 of our order dated July 10, 2023, there is a possibility that this WTM would be influenced by the discussion that took placed in the settlement proceedings,” it added.

In the interim order on June 12, Sebi barred Chandra and Goenka from holding the position of a director or key managerial personnel in any listed company for siphoning off funds of the media firm. Both Chandra and Goenka moved SAT seeking a stay on the Sebi order, citing injustice.