Appoint a new officer to decide on Zee promoters’ case: SAT to Sebi

The new whole-time member (WTM) will have to fix a date for a hearing within a week from the date of filing of the reply by the Goenkas and pass appropriate orders within two weeks after the hearing, SAT said in its order on Thursday.

The order came on an application filed by the Securities and Exchange Board of India (Sebi) on July 24 requesting the appellate tribunal to modify its July 10 order that barred two of its three WTMs – Ashwani Bhatia and Ananth Narayan G – from hearing the Goenkas’ objections in order to eliminate any prejudice.

Bhatia had passed the order against the promoters of Zee Entertainment Enterprises Ltd (ZEEL) on June 12, barring them from holding directorship or managerial position in any listed firm or its subsidiaries for alleged siphoning and round-tripping of funds, until further orders. Narayan was part of the settlement proceedings against them.

The other WTM, Ananta Barua is retiring on July 31.

Sebi had sought SAT’s permission to appoint Narayan or any authorised officer to consider the objections of the Goenkas and pass further orders in the case.The tribunal has ruled out Narayan. If no WTM is available, then Sebi may appoint any authorised officer higher in grade, rank, or position than the WTM to decide the matter against the Goenkas, it said.Sumit Agrawal, founder of Regstreet Law Advisors, said the market watchdog has several options to handle the situation, such as appointing an independent committees like in the NSDL case, or escalating matters to the Supreme Court if needed.

“An example of such delegation occurred during the NSDL Roopalben Panchal IPO case, where a committee comprising Mohan Gopal and V Leeladhar was appointed to investigate allegations against NSDL due to potential conflicts arising from the Sebi chairman’s past role as the NSDL chairman,” he said.

Agrawal, who is a former Sebi officer, said the Sebi chairperson’s order-passing authority has changed over the last decade and a half. It has become customary to delegate this power to WTMs or other members of the board in certain cases.