An Indian tribunal on Monday dismissed an appeal from former Zee Group Chairman Subhash Chandra and Zee Entertainment Chief Executive Punit Goenka over a ban on the duo by India markets regulator from holding board positions in publicly listed companies.
The Securities and Exchange Board of India (SEBI) on June 12 barred Chandra and Goenka from listed company boardrooms over allegations of fund diversion.
The regulator in its order had alleged the duo were actively involved in diverting company funds to the group's other listed entities and firms related to founding shareholders.
The Securities Appellate Tribunal while refusing to vacate the regulator's directions said it does not see merit in interfering in the regulator's order and asked the duo to defend themselves before SEBI.
The ruling comes as Zee and a local unit of Japan's Sony Group are closing in on a merger announced in 2021 to create a $10-billion TV enterprise, with Goenka set to become the merged entity's managing director and CEO. However, regulatory approvals are pending.
A unit of Sony had said it was tracking developments that 'may affect' the deal, while Goenka had reportedly said the merger will go through, "whether or not" he is the CEO of the merged company.
Zee's shares fell as much as 5.7% after the ruling. The stock is down 16.6% so far this year after losing 25.2% in 2022.
