“We now have a scenario earlier than us the place the chairman emeritus and the MD and CEO of this massive listed firm are concerned in a myriad of various schemes and transactions by means of which huge quantities of public cash belonging to listed firms are diverted to personal entities owned and managed by these individuals. The appellant’s conduct is telling on this regard. Not solely have there been violations but in addition the issuance of a number of false disclosures and submission of statements to cowl up such wrongdoings,” Sebi mentioned in a 197-page affidavit to SAT.

Sources mentioned Chandra and Goenka are anticipated to submit their responses quickly.

On June 15, SAT directed them to answer Sebi’s submission on or earlier than June 19, when the tribunal would take up the matter for remaining disposition.

Queries despatched to ZEEL went unanswered till the time of going to press.

Within the interim order on June 12, Sebi barred each Chandra and Goenka from taking key positions at listed firms. Each had moved SAT looking for a keep on the Sebi order, citing injustice.

Sebi additionally submitted that the appellants had not produced any materials to point that they had suffered any prejudice by not getting a private listening to earlier than the interim order was handed. The regulator mentioned it was prepared to provide an instantaneous listening to for the appellants “as early as required”.

Sebi alleged that promoters created a façade by means of sham entries to misrepresent buyers and the regulator in regards to the compensation of Rs 200 crore to ZEEL by seven associated events.

Sebi submitted that the current investigation was triggered after the rejection of the settlement software filed by ZEEL in Essel Group-company Shirpur Gold Refinery (Shirpur), on which the regulator had issued an interim order in April.

The capital markets regulator mentioned it discovered overlapping entities concerned within the siphoning of Shirpur’s funds and on whose account YES Financial institution had appropriated ZEEL’s fastened deposit (FD). On additional investigation into financial institution statements and following the cash path, Sebi discovered evident irregularities.

Sebi was in a position to unearth the brand new findings solely after ZEEL’s letter within the Shirpur matter.

Earlier in October 2019, unbiased auditors Deloitte Haskins & Sells red-flagged the switch of Rs 200 crore as non-disclosure or a doable materials misstatement. 

Two unbiased administrators — Subodh Kumar and Neharika Vohra — had additionally alleged weak company governance and appropriation of FD in direction of cost of promoter loans on the time of their resignation.

In the meantime, the Nationwide Firm Legislation Tribunal deferred its listening to on the potential merger of ZEEL with Sony Footage Networks India to June 26. Goenka was to go the merged entity, however now faces debarment from Sebi.

THE MONEY TRAIL

·         It began with a letter of consolation dated September 4, 2018, given by Subhash Chandra to YES Financial institution for appropriation of a set deposit (FD) held by ZEEL towards a mortgage of Rs 200 crore given to related entities in 2019

·         The letter mentioned that the Rs 200-crore FD accessible with YES Financial institution from any of the Essel Group firms, together with ZEEL, may very well be taken to settle it

·         YES Financial institution had adjusted the loans of seven affiliate entities with this cash

·         Later it got here to mild that these seven entities have been owned/managed by members of the family of Subhash Chandra and Punit Goenka