The Securities Appellate Tribunal (SAT) on Thursday questioned market regulator Sebi's credibility on completing its investigation within a stipulated time in the Zee Entertainment Enterprises' (ZEEL) matter.
SAT was hearing Zee's plea against Sebi's order baring Zee Entertainment Enterprises' Punit Goenka and Subhash Chandra from holding any key managerial positions in the company and other organisations for allegedly siphoning off funds of the media firm.
"There is no certainty that these eight months won't be extended. ...past record of Sebi is that they have always extended it (investigation). This has happened not only in one case but in several cases. Recent one being the Adani and Bennett Coleman. Your (Sebi) credibility to complete the investigation within a stipulated period is not there," SAT observed after hearing the Securities Exchange Board of India's (Sebi's) counsel Darius Khambata.
Khambata in his argument stated "...they waive contracts, which ZEEL had with these companies ...that's it. ...they did not mention what are the services they availed, the consideration for the same... nothing. You (Goenka) are in control of these companies and you don't think you should offer an explanation. ...it is your burden to establish it."
Khambata further stated that the fact that ZEEL saying it will not explain and it doesn't have to explain is critical.
"They are not able to dislodge the interconnection, the proximity of time, the proximity of the amounts and the conduit between the three promoter companies, which clearly show the undisputed facts," he added.
ZEEL said that the Sebi order is critical to the Zee-Sony merger, but the shareholders voted for the merger and not for Goenka, he added.
Abhishek Manu Singhvi, representing Punit Goenka, said that ZEEL admits to the transactions and they were official transactions.
He questioned that if Sebi found it suspicious then why was it kept suspended for eight months.
Singhvi further said, "Sebi's action is 'punitive not preventive' what is the telling urgency to freeze me... Where is the proof? Why am I being barred at this stage before the investigation is concluded ?"
Today the transactions show no loss to ZEEL nor any gain to Goenka, he said.
He added, Goenka is critical for the merger as Sony, a foreign entity, wants support during the transition phase.
"Goenka being in the industry for 10-15 years understands the market," he added.
Singhvi also said the Sebi's order is against the public interest considering a merger with Sony, which has been approved by the National Company Law Tribunal (NCLT).
SAT will continue to hear the matter on September 27.
In June, SAT refused to give any interim relief to Chandra and his son Punit Goenka after the market regulator barred them from holding any key managerial position in any listed company.
Following this, Zee Entertainment Enterprises challenged the Sebi order at SAT.
Meanwhile, the National Company Law Tribunal (NCLT) in August 10 gave its approval to the merger of Zee Entertainment Enterprises and Culver Max Entertainment (earlier known as Sony Pictures Networks India) creating a USD 10-billion media house, the biggest in the country.