Punit Goenka is set to lead the Zee-Sony merged media entity, as the Securities Appellate Tribunal (SAT) on Monday quashed SEBI’s order restraining Punit Goenka from holding the post of MD and CEO of Zee.
Following revelations of alleged misappropriation of funds by Goenka and his father Subhash Chandra, from Zee, the market regulator had banned the father-son duo from holding key managerial (KMP) and executive positions at Zee. SEBI’s interim order, subsequently evolved into an eight-month ban, while SEBI investigated the matter, as SEBI argued that Goenka’s continued involvement with the company would impede the ongoing investigation.
In the order released on August 14, SEBI confirmed that Goenka along with his father Subhash Chandra will not be allowed to hold the position of a Director or a KMP in ZEEL or any of its subsidiaries, while the market regulator completes its investigation on the matter. The order by the capital markets regulator came on the back of an investigation into allegations related to the appropriation of certain fixed deposits of Zee by Yes Bank for squaring off loans of related entities of Essel Group.
The tribunal said that in the event that something material comes up during the ongoing SEBI investigation, then appropriate procedures can be adopted in accordance with the law. “We also make it clear that any observation made in this order is prima facie observation and will not influence the investigation nor will it be utilised by either of the parties,” SAT added.
Goenka’s earlier dismissal from Zee, was proving to be a major damper on the upcoming merger between Zee and Sony, especially as promoters and shareholders alike desired Goenka to lead the merged entity.
Welcoming reinstatement
This is why market watchers have welcomed Goenka’s reinstatement as the MD and CEO of Zee.
Media entrepreneur Ronnie Screwvala said on Twitter, reacting to Goenka’s reinstatement, “Having been one of the torch bearers of Media & Entertainment in India – more power to you (Goenka) to lead innovation and disruption in the next decade.”
Shriram Subramanian, Founder and MD of InGovern Research Services, said, “This order is paving way for consolidated Zee-Sony to take birth and emerge as a force under the leadership of Punit Goenka. It has been 2+ years since merger was announced. Time for shareholders to reap benefits soon of a listed media MNC in India.”
The Tribunal’s order simplifies the merger process between Sony and Zee because there is no restriction now on the appointment of Goenka as the CEO of the merged entity. Sources said Goenka is back as the Managing Director of Zee Entertainment on Monday. However, SEBI could also appeal SAT’s decision with the Supreme Court, experts said.
Earlier, in a hearing on August 30, SAT had expressed unhappiness with the amount of time taken by SEBI for the investigation.
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Published on October 30, 2023
