Zee Entertainment shares surge 6% as firm forms interim committee to run operations

Shares of Zee Entertainment Enterprises Ltd soared 6% on Monday said it formed an interim committee to run company operations after CEO Punit Goenka lost a bid to overturn SEBI's ban on him holding board positions in publicly listed companies.

The interim committee will be under the supervision of Zee's board, a company spokesperson said.

“The Board of ZEE Entertainment Enterprises Ltd. (ZEEL) in a meeting conducted on July 14, 2023, evaluated and discussed all the necessary steps, in light of the interim order passed by the Securities and Exchange Board of India (SEBI) and the subsequent judgement by Securities Appellate Tribunal (SAT). Since the order restricts Punit Goenka from holding the position as director or key managerial position in a listed company, the Board of the Company has constituted an Interim Committee of senior executives to ensure smooth operations of the Company.

"The Interim Committee will be under the supervision of the Board and will seek its guidance on all matters pertaining to the Company. The Board continues to have immense faith in the value-building leadership skills showcased by Punit Goenka and will monitor the progress of the matter. The Board also remains confident that the Company will deliver robust growth consistently and generate higher value for all shareholders," said the spokesperson.

On Monday, Zee's shares closed 6% higher at Rs 229.65 apiece.

Earlier this month, the Securities Appellate Tribunal (SAT) dismissed pleas of Zee Entertainment promoters Subhash Chandra and Punit Goenka challenging Sebi's interim order restraining them from holding any directorship or key managerial positions in listed entities.

The appellate tribunal on June 27 had reserved its order on petitions filed by Essel Group Chairman Subhash Chandra and ZEEL Managing Director and CEO Punit Goenka that challenged the Securities and Exchange Board of India's (Sebi's) interim order which restrained the duo from holding board positions in public listed companies for a year on account of alleged fund diversion.

''In the instant case we find that an ex parte ad interim order was issued considering the sense of urgency which was infused by a host of circumstances, namely, diversion of funds from a listed company to related parties which are controlled by the appellants,'' the SAT order stated.

On June 19, the counsel for Zee Entertainment Enterprises said the market regulator had no evidence beyond the bank statements to prove the allegations of round-tripping of funds and that Sebi cannot pass an ex-parte order.