Subhash Chandra gets relief in Bombay HC against SEBI’s summons in fund diversion case

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The Securities and Exchange Board of India (Sebi) on Wednesday said it won’t take any action against Zee Entertainment Enterprises’ Subhash Chandra for three weeks regarding the summons issued in an alleged fund diversion case. Chandra is the Essel Group Chairman. 

On March 5, 2024, Chandra had filed a petition in the court alleging that the summons issued by Sebi contained allegations couched in a language that indicated they had already been proved conclusively. He urged the court to declare the summons illegal and void.

On Wednesday, a division bench of Justice GS Kulkarni and Firdosh Pooniwalla granted Sebi two weeks to file its reply and adjourned the matter for three weeks.

Sebi has been investigating the alleged fund diversion by Chandra and his son Punit Goenka who is  the managing director (MD) and CEO of Zee. In a confirmatory order in August 2023, Sebi banned both of them from holding key positions in four group firms.

The same month, Goenka had moved the SAT and secured a stay order against the Sebi order.

Last week, Sebi told the Securities and Appellate Tribunal (SAT) that Chandra suppressed material facts in the alleged fund diversion case involving Zee Entertainment Enterprises.

Sebi counsel Darius Khambata told SAT that Chandra filed an appeal in SAT in late February and made arguments on March 8, three days after he approached the Bombay High Court on March 5 and wanted the court to declare the Sebi probe as ‘illegal and void’ because of it being ‘vitiated by bias and conflict of interest’.

Sebi had earlier submitted to the tribunal that Chandra was ‘not cooperating’ with the summonses issued.

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