Terming the applications made by Essel Group chairman Subhash Chandra and ZEEL Managing Director & Chief Executive Officer (MD &CEO) Punit Goenka that there was no urgency needed while passing the interim order on June 12 as “completely false and misleading”.
“We have a situation before us where the Chairman Emeritus and the MD & CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons. The Appellant’s conduct is telling in this regard. Not only have there been violations but also the issuance of multiple false disclosures and submission of statements to cover up such wrongdoings,” Sebi has said in a 197-page affidavit to SAT.
Sources said Chandra and Goenka too are expected to submit their responses soon.
In an interim order on June 12, Sebi debarred both Chandra and Goenka from taking key positions at listed companies. Both have moved SAT seeking a stay on Sebi’s order citing injustice.
Sebi has alleged that promoters created a façade through sham entries to misrepresent investors and the regulator about the repayment of Rs 200 crore to ZEEL by seven related parties.
The markets regulator said that it found overlapping entities involved in the siphoning of Shirpur’s funds and that on whose account Yes Bank had appropriated ZEEL’s Fixed Deposit. On further investigation into bank statements and tracing of the source of the money, Sebi found glaring irregularities.
Earlier in October 2019, independent auditors Deloitte Haskins and Sells had red-flagged the transfer of Rs 200 crore as non-disclosure or a possible material misstatement. Two independent directors—Subodh Kumar and Neharika Vohra—had also alleged poor corporate governance and appropriation of FD towards payment of promoter loans at the time of their resignations.
Meanwhile, the National Company Law Tribunal (NCLT) deferred its hearing on the potential merger of ZEEL with Sony Pictures Network India to June 26. Punit Goenka was to head the merged entity but now faces debarment from Sebi.