In an unprecedented action that could impact the Zee-Sony merger, the Securities and Exchange Board of India (Sebi) has barred Subhash Chandra, chief of the Essel group, and Punit Goenka, managing director & CEO of Zee Entertainment Enterprises Ltd (Zee), from holding any directorial or key managerial positions in any listed companies or its subsidiaries until further orders.

The capital market regulator has allegedly found out that Chandra and Goenka abused their position as director or key managerial person (KMP) of a listed firm to siphon off funds.

“Although the promoter family is only holding 3.99 per cent shares in Zee, Subhash Chandra and Punit Goenka continue to be at the helm of affairs of Zee.

“Considering the above, I am of the opinion that, while the investigation is still underway, their continuation as a director/KMP in any listed company or its subsidiaries is likely to be prejudicial to the interest of those companies, particularly its investors.’’

‘’Therefore, I am convinced that, pending completionof investigation by Sebi, interim directions need to be issued to safeguard the management of such companies and protect their investors and other stakeholders,’’ Ashwani Bhatia, whole-time member of Sebi, said in a 16-page order.

According to the market regulator, Chandra and Goenka ``alienated the assets of Zee’’ and other listed companies of Essel group for the benefit of associate entities, which are owned and controlled by them.

“The siphoning of funds appears to be a well-planned scheme since, in some instances layering of transactions involved using as many as 13 entities as pass-through entities within a short period of two days only.

The fact that some of the entities used in these layers are common to the ones used for fund diversion in the Shirpur Gold Refinery Ltd (SGRL) case only strengthens the prima facie finding in this case that funds have been diverted from Zee, which need to be investigated thoroughly’’, Sebi said.

In April, Sebi had issued interim order-cum-show-cause notices against SGRL, its erstwhile chairman Amit Goenka, promoter Jayneer Infrapower and Multiventures and five others for allegedly siphoning off funds from the company and violating other rules. SGRL was taken to the NCLT by its lenders.

In its 44-page interim order, Sebi had observed that the financial statements of SGRL were misrepresented to facilitate diversion of its assets to Jayneer via promoter-connected entities.

This in turn led to the sale of assets to the connected entities without receipt of consideration from them.