Securities and Exchanges Board of India’s legal representative claimed on Monday that Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises Ltd, is not cooperating in an investigation into alleged diversion of funds from Zee Entertainment Enterprises. SEBI counsel informed the Securities Appellate Tribunal in a hearing on this matter on Monday.

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Chandra’s legal counsel contested these allegations. Representing SEBI, senior counsel Darius Khambata said the market regulator made efforts to engage with him, including by sending summons and requesting documents, but had only been met with promises of delayed responses. 

“We will put this on record that, in fact, he [Chandra] has not been co-operating. SEBI has been writing to him, giving him summons and seeking information documents. Chandra has been saying that he will take 6-8 weeks,” said Khambata. 

“Suddenly he woke up and filed an application, much after the order was passed in August 2023. We would like to place this on record by filing an affidavit.”

In response, Shyam Mehta, Chandra’s counsel, referred to a detailed October ruling by SAT, which, he said, addressed the issues at hand, and sought a stay on SEBI’s August order.

“The order was prejudicial not only to my reputation, but also to the companies with which I am associated. Virtually I am being treated as a criminal,” said Chandra in his plea against SEBI’s August order.

On August 14, 2023, SEBI had issued an order against Subhash Chandra and Punit Goenka for alleged fund diversion, and barred them from holding any key managerial positions in listed entities. SEBI mandated the completion of its investigation within eight months, setting an April deadline.

On 31 October, Punit Goenka was reinstated as the managing director and chief executive of Zee Entertainment after SAT overturned a ban imposed by the markets regulator for allegedly syphoning off company funds.

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Recent Bloomberg reported that SEBI has unearthed a financial discrepancy exceeding $240 million, or around ₹2,000 crore, in the accounts of Zee Entertainment Enterprises. This amount is nearly 10 times more than what SEBI investigators had initially estimated. Zee has however denied these reports. and has threatened legal action..

SAT has given 10 days for SEBI to file a reply in the matter and posted the matter for further hearing.