The Securities Appellate Tribunal (SAT) overturned a directive from market regulator SEBI prohibiting Punit Goenka, the CEO of Zee Entertainment, from attending board meetings of the publicly traded businesses for a year on 30 October, according to a report by Reuters.
In June 2023, the Securities and Exchange Board of India (SEBI) issued a temporary injunction barring Subhash Chandra Goenka, the chairman of the Essel Group, from holding a board position in any organisation established by the combination or merger of the four Zee group firms.
According to SEBI's findings, Chandra and Goenka misused their authority as Zee Entertainment directors in 2019 by embezzling money for their personal gain.
“Appellant (Goenka) will cooperate in the investigation. In the event if something material comes up during the investigation, then appropriate procedures can be adopted by SEBI in accordance with law. We also make it clear that any observation made in this order is prima facie observation and will not influence the investigation nor will it be utilised by either of the parties,” the order read.
Zee Entertainment's shares were up by 1.70 per cent at Rs 250.7 at 1:30 PM, after the news broke out.
SEBI can still challenge SAT's order by appealing against it in the Supreme Court of India.
This probably clears the path for Zee Entertainment and Culver Max Entertainment (Sony Pictures India) to complete their merger, forming a $10 billion media and entertainment behemoth.
Despite having the necessary regulatory permits and being announced in 2021, the merger has been postponed because of legal disputes involving loan defaults by a Zee group company.
The shareholders of Sony Pictures, a unit of Japan's Sony Group, were notified in late September 2023, that the merger which was expected to close by FY24 will be delayed.