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Mumbai : Zee Entertainment Enterprises Ltd Chairman Emeritus Subhash Chandra and CEO and Managing Director Punit Goenka have been involved in several schemes and transactions in which substantial public funds from listed companies were diverted to private entities controlled by them, Securities and Exchange Board of India (Sebi ), said in an affidavit filed with the Securities Appeals Court.
Mumbai : Zee Entertainment Enterprises Ltd Chairman Emeritus Subhash Chandra and CEO and Managing Director Punit Goenka have been involved in several schemes and transactions in which substantial public funds from listed companies were diverted to private entities controlled by them, Securities and Exchange Board of India (Sebi ), said in an affidavit filed with the Securities Appeals Court.
“The conduct of the appellants (Goenka and Chandra) is very telling. Not only were there irregularities, but many false disclosures and filings were made to cover up such wrongdoings. In Shirpur, we also saw that the promoters The group sold its shares in the open market at the right time to avoid bearing the brunt of the decline in Shirpur’s stock market value. Ultimately, it is the small retail investors who bear the share price drop.”
“The conduct of the appellants (Goenka and Chandra) is very telling. Not only were there irregularities, but many false disclosures and filings were made to cover up such wrongdoings. In Shirpur, we also saw that the promoters The group sold its shares in the open market at the right time to avoid bearing the brunt of the decline in Shirpur’s stock market value. Ultimately, it is the small retail investors who bear the share price drop.”
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Sebi’s submission was in response to a request by Goenka and Chandra to challenge the regulator’s order restricting them from holding key management positions in listed companies.
In its June 12 order, Sebi alleges that the father-son duo used various entities to steal funds from ZEEL to falsely show that the loan was recovered but used it for their own benefit in 2019. The father and son later appealed to the SAT, pleading not guilty and claiming that principles of natural justice were not followed.
“In fact, if the person is found to be addicted to manipulating the securities market during the preliminary examination, Sebi is obliged to pass an ex parte interim order to safeguard the interests of investors and protect the integrity of the securities market,” according to the 197-page affidavit filed by Sebi.
Sebi further claimed that the duo created false entries to falsely claim to investors and market regulators that the money had been returned by seven related companies, while ZEEL’s funds were circulated through complex channels and eventually remitted to its account.
Queries to Sebi and ZEEL did not receive a response.
Goenka and Chandra are filing rebuttals, the people said.
The appellants argued that since the securities had not been traded, they could not be charged under the PFUTP regulations. However, Sebi believes this argument is “false”.
These facts, Sebi said, justify the need for urgent action on Sebi’s part to preserve the management of such companies and protect their investors and other stakeholders.
“Any prayers and relief sought by Chandra and Goenka in their current appeal to the SAT are of no value. For the benefit of ZEEL’s public shareholders and the integrity of the securities markets, we also pray for the dissent order of June 12 The instructions in are maintained,” it added.
The court has granted Sebi 48 hours for the regulator to submit an answer on the matter. Today, the State Administration of Taxation will make a ruling on the matter.
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