Subhash Chandra and Punit Goenka filed an appeal in the current case, alleging that the SEBI ruling violated the principles of natural justice. The appeal was handled by Economic Laws Practise. The appellants emphasised that they had not received a show-cause notice before the passing of the SEBI ruling. In an interim order, SEBI noted that Chandra and Goenka had misused their authority as directors of a publicly traded company by taking money for themselves and selling the assets of ZEEL and other listed Essel Group companies to associate entities they owned and controlled. Following the discovery of prima facie evidence that the two had syphoned off cash, SEBI determined it was appropriate to prevent them from keeping their important positions. The interim decision issued by SEBI on July 12 prohibiting Chandra and Goenka from holding directorial or key management roles in any listed business or its subsidiaries was challenged by Chandra and Goenka in an SAT filing.
Contention from Parties
The petitioner made it clear that his challenge of the SEBI’s method of issuing the order was not on the case’s merits. He also maintained that Chandra was not in charge of Zee’s operations because he was Chairman Emeritus, an honorary role.
The SEBI contended that the two had misappropriated shareholder funds while enjoying the trust of the shareholders.
Analysis of SAT order
The Securities Appellate Tribunal A coram of Justice Tarun Agarwala and presiding officer Meera Swarup upheld an interim order issued by the Securities and Exchange Board of India prohibiting Essel Group Chairman Subhash Chandra and Chief Executive Officer of Zed Entertainment Enterprises Limited Punit Goenka from holding directorial or key managerial posts in listed companies and refused to stay the effect of SEBI order, directing Goenka and Chandra to file their replies by the deadline within two weeks and ordered SEBI to hear the case within one week of the submission of the responses.