HC orders Zee’s Subhash Chandra to respond to Sebi’s March summons

Mumbai: The Bombay high court on Wednesday ordered Subhash Chandra, chairman emeritus of Zee Entertainment, to furnish documents sought by the Securities and Exchange Board of India (Sebi) in its summons issued on 27 March in a fund diversion case. 

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

A bench led by Justices K R Shriram and Jitendra Shantilal Jain was hearing a petition filed by Subhash Chandra challenging the summons issued by Sebi and its investigation into the matter.

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

Chandra 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.

Senior counsel Ravi Kadam, appearing for Chandra, stated that the documents called for in the annexed summons will be made available in four weeks.

The bench disposed of the matter on Wednesday.

Sebi 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.

"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,” the petition by Chandra said.

Separately, Janak Dwarkadas, senior counsel representing Zee informed the court that the regulator had issued similar summons to the company. 

The media baron also urged the court to restrain Sebi from issuing a final investigative report.

Meanwhile, Chandra filed an application before SAT seeking relief after Sebi’s confirmatory order in August 2023, which barred him from leadership roles in related entities. The tribunal is yet to pass any final order in the matter.

In 2023 June, Sebi's initial probe suggested that ₹200 crore was diverted through related party transactions from Zee. This was contested by Subhash Chandra and CEO Punit Goenka before the Securities Appellate Tribunal (SAT). The regulator informed the tribunal that a broader investigation was underway due to the complexity of the transactions.