Bombay HC directs Subhash Chandra to furnish documents sought by Sebi | Company News
Bombay HC directs Subhash Chandra to furnish documents sought by Sebi | Company News
The Bombay High Court on Wednesday directed Essel Group Chairman Subhash Chandra to furnish documents and information sought by the Securities and Exchange Board of India (Sebi) in its summons in an alleged fund diversion case involving Zee Entertainment Enterprises.
Chandra has been given four weeks to respond to the Sebi’s summons issued on March 27. The court has clarified that Chandra may not respond to an earlier summons issued by the markets regulator on January 12.
Responding to the Sebi’s communication sent in January, Zee has already submitted the information to the regulator, the counsel said.
Chandra had filed a plea against the summons issued by Sebi. A separate appeal by the former Zee chairman is also scheduled to be heard on July 29 by the Securities Appellate Tribunal (SAT).
Chandra’s counsel challenged Sebi’s summons, stating that the regulator sought ‘comments’ in the communication issued to produce documents which can only be done via a show-cause notice. He added that Sebi’s letter disclosed ‘pre-disposition’ and ‘bias’ even before the investigation by making confirmatory statements on the alleged violations.
While the court has clarified that no comments are to be made in response to the Sebi summons, it dismissed the appeal directing the regulator to issue fresh summons if more information was needed from Zee.
“If any further documents or information is required, they may issue a fresh communication or summons to Zee,” the bench added.
The bench said if any document was unavailable, Chandra may say so in his response to Sebi and may even guide as to where to seek the documents.
During the hearing, the bench pointed out that Sebi’s summonses did not disclose bias and they would not strike off the investigation.
The counsel for Sebi also assured that the final order would be passed by a whole-time member other than Ashwani Bhatia to remove any biases as he was part of the hearing in a connected case.
The markets regulator is investigating the alleged fund diversion by Chandra and his son Punit Goenka, who is also the managing director (MD) and the chief executive officer (CEO) of Zee. An initial order issued pertains to a letter of comfort (LoC) granted to the tune of Rs 2,000 crore. However, Sebi had submitted before the SAT that more LoCs were under scrutiny.
In a confirmatory order in August 2023, Sebi barred both of them from holding key positions in four group firms. The SAT had granted relief to Goenka.
The father-son duo had filed appeals separately for relief.
Shares of Zee rose 4.6 per cent on Wednesday to end at Rs 156, valuing the media behemoth at almost Rs 15,000 crore.
First Published: Jun 26 2024 | 6:06 PM IST
