SAT Partly Lifts SEBI Market Ban On ZEEL, Punit Goenka To Allow Fundraise From Promoter Group Entity

The Securities Appellate Tribunal (SAT) has partly relaxed the market-access restrictions imposed on Zee Entertainment Enterprises Limited (ZEEL) and its former MD Punit Goenka by SEBI.

It has allowed them to complete a preferential issue of fully convertible warrants to a promoter group entity.

The permission is subject to ZEEL and Goenka depositing their respective penalties of ₹30 lakh and ₹58 lakh within one week. The Tribunal has also extended by one week the deadline for completing the warrant issue, which was set to expire on August 14.

A coram comprising Presiding Officer Justice P.S. Dinesh Kumar, Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar passed the order on Friday.

“Direction (a) in para 438 of the impugned order is stayed for a limited purpose. The appellant company/ Punit Goenka are permitted to complete the process of issue of fully convertible warrants with the promoter group entity on a preferential basis, subject to deposit of full penalty within one week,” the tribunal ruled.

The tribunal made it clear that the market-access restriction has not been lifted completely.

It said, “Debarment in para 438(a) shall continue so far as the appellants exist to the securities market except to the extent mentioned in para 2 above.”

The tribunal further permitted ZEEL to undertake certain mutual fund transactions for its ordinary business requirements. It said:

"The appellant company is permitted transactions on mutual funds for day to day requirements in ordinary course of business and not for any other purpose.”

The case relates to SEBI's action against ZEEL, its former Managing Director and CEO Punit Goenka and former Chairman Subhash Chandra over the alleged unauthorised use of ZEEL's Hyderabad property as security for loans obtained by four Essel Group entities.

SEBI's order records that the four entities had obtained loans aggregating around ₹726 crore, with ZEEL's Hyderabad property offered as security. The regulator found that the security was created without prior approval from ZEEL's Audit Committee, Board of Directors, or shareholders.

SEBI also found that the transaction was not disclosed as a related-party transaction. It further held that ZEEL failed to make adequate disclosures concerning the contingent liability arising from the transaction and material developments in the subsequent Delhi High Court proceedings.

By an order dated July 31, 2026, SEBI restrained ZEEL from accessing the securities market for two months. Goenka and Chandra were restrained from accessing the securities market for 12 months.

SEBI also imposed penalties of ₹30 lakh on ZEEL, ₹58 lakh on Goenka, and ₹60 lakh on Chandra. The penalties were imposed for violations under the SEBI Act, LODR Regulations, and PFUTP Regulations.

ZEEL and Goenka subsequently approached SAT challenging the regulator's order and seeking interim relief.

Before the Tribunal, ZEEL argued that the market-access restriction would prevent it from completing a ₹3,000 crore-plus fundraise. The fundraise had received shareholder and stock exchange approvals and was required to be completed by August 14, 2026.

SAT has now permitted ZEEL and Goenka to complete the preferential issue of fully convertible warrants despite the continuing market-access restriction. The permission is conditional on depositing their full penalties within one week.

For Appellants: Senior Advocates Zal Andhyarujina, P.N Modi, Advocates Shruti Rajan, Anubhav Ghosh, Vivek Shah, Praneeta Ragji, Taposh Das, Anugraha Jaisingh, Rushin Kapadia, Shruti Rajan, Anubhav Ghosh, Vivek Shah, Praneeta Ragji, Taposh Das and Anugraha Jaisingh

For Respondents: Advocates Mihir Mody, Vijay Chockalingam and Aavish Shetty