The Securities Appellate Tribunal (SAT) on Monday set aside the confirmatory order issued by the Securities and Exchange Board of India (Sebi) against Punit Goenka, the promoter of Zee Entertainment Enterprises (Zee).

Sebi had barred Goenka from holding the position of director or key managerial personnel (KMP) in the company and other group entities for alleged siphoning off funds.

Goenka had challenged the market regulator’s order at the appellate tribunal.

“The impugned order cannot be sustained and is quashed insofar as it relates to the appellant (Goenka). The restraint order passed by the respondent (Sebi) pursuant to the ad-interim order and the confirmatory order restraining the appellant to functioning as a Managing Director and as directed in paragraph 108(ii) of the impugned order is set aside. The appeal is allowed,’’ Justice Tarun Agarwala, presiding officer, and Meera Swarup, technical member, said in the order.

Sebi it is believed has not ruled out an appeal against the appellate tribunal order at the Supreme Court.

The confirmatory order by Sebi chairperson Madhabi Puri Buch had said Goenka and his father Subhash Chandra shall not hold the position of a director or KMP in Zee, Zee Media Corporation, Zee Studios (wholly owned subsidiary of Zee), Zee Akaash News (wholly owned subsidiary of Zee Media Corporation).

Chandra and Goenka shall also not hold key positions in any company formed after a merger of the companies with any other entity. Sebi had said the probe against the Goenkas shall be completed in a time-bound manner and any event, within eight months from the date of the order.

While setting aside the order, the tribunal also directed Goenka to cooperate with Sebi’s probe against him. If any material comes out against Goenka during the investigation, the appropriate procedure can be adopted by the regulator following the law, it added.

In June this year, Sebi had barred then Essel Group chairman Subhash Chandra and Goenka from holding the position of a director or key managerial personnel in any listed company for allegedly siphoning off funds of the media firm. The confirmatory order was subsequently passed in August.

During the hearing at the SAT, Abhishek Manu Singhvi, senior counsel for Goenka, said Sebi’s June order is full of errors and that the findings given are based on surmises and conjectures.

He further pointed out that there was no real urgency in passing the ex parte ad interim order since the transactions in question were made in 2019 whereas the ex parte ad interim order was passed on June 12, 2023.

Darius Khambatta, senior counsel for Sebi, said there were five transactions which indicated round round-tripping offunds from Zee.