SEBI restrains Subhash Chandra and Punit Goenka from becoming directors or top management of any listed company
The Securities and Exchange Board of India (SEBI) has barred Subhash Chandra and Punit Goenka, the top executives of Zee Entertainment Enterprises Ltd (ZEEL), from becoming directors or top management of any listed company. The two have been accused of indulging in fund diversion from other listed companies of the Essel Group for their own benefit. Chandra and Goenka have 21 days to submit their response to the SEBI’s order.
SEBI investigation reveals fund diversion by Essel Group companies
According to the SEBI investigation, Subhash Chandra issued a letter of comfort on September 4, 2018, on behalf of the Essel Group to Yes Bank. The letter was issued to guarantee the loans taken by other companies of the Essel Group from Yes Bank. The letter stated that instead of the INR 200 crore loan taken by Essel Green Mobility, a fixed deposit of INR 200 crore will be kept in Yes Bank by one of the group companies. In case of default, Yes Bank can adjust this fixed deposit against the loan.
SEBI also found that only a few people were aware of the letter of comfort issued by the Essel Group, and even the ZEEL board was not aware of it. ZEEL and other listed companies paid INR 143.90 crore to various group companies, out of which INR 143.90 crore was transferred back to ZEEL’s account. SEBI is still investigating the remaining funds.
Conclusion
SEBI’s order against Subhash Chandra and Punit Goenka is a significant step towards ensuring transparency and accountability in the corporate sector. The order will also serve as a warning to other companies and their top executives to comply with the regulations and avoid any wrongdoing.
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