Bombay HC grants relief to Zee's Subhash Chandra, asks him to submit documents in reply to Sebi's March summons

The Bombay High Court on Wednesday accepted the contentions raised by Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises Ltd (ZEE), regarding a writ petition filed by him against summons issued by the Securities and Exchange Board of India (SEBI) on January 12, 2024.

On Wednesday, the high court asked Chandra to furnish documents sought by the Securities and Exchange Board of India (Sebi) in its summons in a fund diversion case.

The court, in its verbal order, said Chandra needed to respond to the recent summons of March and not the earlier one from 12 January. A detailed order is pending.

Chandra in his plea stated that the Sebi summons did not comply with the provisions of the SEBI Act, contained pre-determined and conclusive allegations, and were in the nature of a show cause notice.

He argued that Sebi's summons contained allegations couched in a language that implied he was guilty and requested the court to declare the summons invalid and unlawful. He alleged that the summons were biased, unfair, arbitrary and predetermined.

Sebi had alleged that Chandra was trying to stop the investigation because he did not respond to the 12 January summons.

In January, Sebi issued multiple summons against Chandra in its investigation pertaining to the alleged fund diversion case. However, Sebi said that Chandra did not respond to those summonses.

In his writ petition, Chandra had also raised concerns pertaining to the prevailing bias at the market regulator’s end, which were previously observed by the Securities Appellate Tribunal (SAT).

Last year, the Sebi had said its probe showed that Rs 200 crore was diverted through related party transactions from Zee. Subhash Chandra and CEO Punit Goenka had contested the claim before SAT. It informed the tribunal that a broader investigation was underway due to the complexity of the transactions.