SAT asks SEBI to change whole time member who will hear Punit Goenka, Subhash Chandra siphoning of funds case

The Securities Appellate Tribunal (SAT) today directed the Securities and Exchange Board of India (SEBI) to appoint another Whole Time Member (WTM) to hear the appeal filed by Zee Entertainment Enterprises Limited (ZEEL) promoters Punit Goenka and Subhash Chandra challenging allegations of siphoning of funds made against them..SAT passed the direction while dismissing an appeal by Goenka and Chandra challenging an interim order of SEBI passed by WTM Ashwani Bhatia barring the two from holding directorial or key managerial posts in listed companies..A coram of Justice Tarun Agarwala and presiding officer Meera Swarup directed Goenka and Chandra to raise their objections against the interim order before SEBI within two weeks.However, it directed SEBI to appoint another WTM to consider Goenka and Chandra's objections to remove any possibility of bias..The Appellate Tribunal noted that while passing the order under challenge against the appellants, Bhatia considered an order passed in April 2023 where he had been the presiding member and where neither Goenka nor Chandra was a party.SAT also noted that Bhatia had been a member on a committee which was considering a settlement application filed by the appellants in another case.In view of these incidents, the tribunal concluded there was a possibility of the WTM being influenced. It thus ordered SEBI to appoint another WTM to consider the objections that the appellants may have against the SEBI order."There is a possibility of the WTM being influenced by the discussions that took place in the settlement proceedings. In our opinion WTM is required to focus on the material evidence which is on the record and should not import information which is in his personal knowledge. Thus, in order to remove any kind of bias, we direct SEBI to appoint another WTM to consider the objections of the appellants," the order stated..The appellants had moved the SAT claiming that the SEBI interim order was passed without granting them a hearing and without spelling out the reasons to show urgency in passing the order..Senior Advocates Janak Dwarkadas, Pesi Modi with Advocates Somasekhar Sundaresan, Kunal Katariya, Nitesh Jain, Shruti Rajan, Anubhav Ghosh, Vivek Shah, Vatsala Kumar, Harishankar Raghunath, Zerrick Dastur, Smriti Singh, Kushil Shah, Jitendra Motwani and Manendra Singh, briefed by Economic Laws Practice, appeared for both appellants.Senior Advocate Darius Khambata with Advocates Aditya Mehta, Vidhi Shah, Jayesh Ashar, Mihir Mody, Arnav Misra and Harshvardhan Melanta, briefed by K Ashar & Co. appeared for SEBI..[Read order]