Mumbai: The Securities and Exchange Board of India (Sebi) on Wednesday submitted before the Bombay High Court that it would not take any action for three weeks regarding the summons issued to Zee Entertainment Enterprises Subhash Chandra in an alleged fund diversion case.
Chandra had filed a petition in the court on 5 March, alleging that the summons issued by Sebi contained allegations couched in a language that indicated they had already been proved conclusively. He urged the court to declare the summons illegal and void.
A division bench of Justice GS Kulkarni and Firdosh Pooniwalla granted Sebi two weeks to file its reply and adjourned the matter for three weeks.
In January, the markets regulator had issued multiple summons against Chandra to engage with the media baron in its ongoing investigation pertaining to the alleged fund diversion case. However, Sebi said that Chandra did not respond to the summons.
“The nature of the summons is as if the same as an ex-party interim order show for justice. Yet the same is being arranged at the stage of investigation,” the petition by Chandra said. “From a fair reading of the summons, it is apparent that Sebi has already predetermined the petitioner as guilty at the investigation stage itself, without following due process, principles of natural justice, ongoing investigation is nothing but a sham and a formality.”
Senior counsel Ravi Kadam, representing Chandra, argued that the summons were issued for producing certain documents in an ongoing case. “However, under the guise, all kinds of conclusive findings brought which tantamount to a show cause notice”. Kadam said.
He also sought the court’s intervention asking it to declare the investigation being conducted by the present investigation team of Sebi, investigating authorities, cooperation, finance department as ‘illegal and void’ as it is vitiated by bias and conflict of interest, etc.
The media baron urged the court to restrain Sebi from issuing a final investigative report.
Separately, Chandra has appealed before the Securities Appellate Tribunal (SAT) against Sebi’s confirmatory order of August 2023. that restrained him from taking any key managerial position in his group companies.
The order clarified that the investigation into the matter was to be completed within eight months from August. While the matter was being heard by the SAT, Sebi informed the tribunal that summons were issued on 12 and 27 January 2024.
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Published: 20 Mar 2024, 07:47 PM IST