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ZEEL & Punit Goenka take SEBI ban fight to SAT, seek interim relief
Tribunal to hear plea on Wednesday as company seeks interim relief from two-month bar
MUMBAI: Zee Entertainment is taking its SEBI battle to the next court of call. Zee Entertainment Enterprises (ZEEL) and its chief executive officer Punit Goenka have moved the Securities Appellate Tribunal (SAT) challenging the Securities and Exchange Board of India (SEBI) order restricting their access to the securities market.
SAT has listed the matter for hearing on Wednesday after counsel for ZEEL sought an urgent hearing and interim relief, citing the two-month market-access restriction imposed on the company.
“I have been barred from accessing the securities market for two months,” counsel appearing for ZEEL told the tribunal while seeking an urgent hearing.
Under SEBI’s July 31 order, ZEEL has been barred from accessing the securities market for two months, while Goenka and promoter Subhash Chandra have each been restrained from accessing the market for 12 months.
The regulator has also imposed monetary penalties of Rs 30 lakh on ZEEL, Rs 58 lakh on Goenka and Rs 60 lakh on Chandra. The combined penalty of Rs 1.48 crore is to be paid within 45 days.
The proceedings stem from the alleged unauthorised use of ZEEL’s property in Hyderabad’s Jubilee Hills as security for loans raised by four Essel Group entities from Indiabulls Housing Finance.
According to SEBI’s findings, the property was used to secure loans worth around Rs 726 crore. The title deeds were deposited in December 2018 and released in June 2020 after around Rs 225 crore was repaid.
SEBI also flagged the absence of approvals from ZEEL’s Audit Committee, Board and shareholders for the transaction. The regulator alleged shortcomings in disclosures relating to the pledge, related-party transaction, contingent liability and subsequent developments involving the property.
The proceedings further examined disclosures concerning litigation before the Delhi High Court, a non-disposal undertaking relating to the property and the subsequent release of the title deeds.
The appeal comes at an important juncture for ZEEL. On July 31, the same day SEBI issued its order, shareholders approved a Rs 3,143.5 crore preferential issue of fully convertible warrants to promoter group entity Sunbright Mauritius Investments.
The issue is expected to take the promoter group’s holding in ZEEL to 23.79 per cent and is intended to provide capital for the company’s growth plans.
The regulatory action also comes against a challenging operating backdrop for ZEEL’s core media and advertising businesses. The company reported operating revenue of Rs 8,294 crore in FY25, with advertising revenue declining 11 per cent to Rs 3,591 crore. Subscription revenue, however, rose 7 per cent to Rs 3,926 crore.
For ZEEL and Goenka, Wednesday’s SAT hearing is therefore the immediate legal checkpoint. The company is expected to press for interim relief as it seeks to limit the impact of SEBI’s market-access restrictions while the broader challenge to the regulator’s order proceeds.
