SAT allows Zee to proceed with ₹3,143 crore warrant issue
The tribunal has extended Extends the deadline for the issuance by one week, subject to payment of penalties but debarment by SEBI on undertaking mutual-fund transactions will to continue
On Friday, the Securities Appellate Tribunal (SAT) granted a limited stay to SEBI's two-month debarment of Zee Entertainment Enterprises and CEO Punit Goenka, enabling the company to proceed with its proposed preferential issue of fully convertible warrants to a promoter group entity. The warrant issue, targeting over ₹3,100 crore, requires Zee and Goenka to deposit the full penalty within a week.
The SAT extended the warrant issuance deadline by one week and allowed Zee to engage in mutual-fund transactions for daily business needs, but not for other purposes, including dividend payments. The debarment remains in effect, except for the mentioned reliefs. SAT noted that 76.64% of public shareholders approved the warrant issue at the extraordinary general meeting on July 31, with approximately 96% of Zee's shareholders being public shareholders.
SEBI had not objected to post-debarment investment, stating it was "illogical" as no other legal barriers were presented aside from the debarment order. During the hearing, SEBI's counsel confirmed no PFUTP violations were alleged against Zee in the impugned order concerning securities dealings. Zee argued that its share price decline following SEBI's order could jeopardize the capital raise if the issue were delayed further.
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