SAT Questions Rationale Behind SEBI's 2-Month Market Ban On Zee Entertainment, Reserves Order On Interim Relief

The Securities Appellate Tribunal on Wednesday reserved its order on the interim relief sought by Zee Entertainment Enterprises Limited (ZEEL) and Punit Goenka against SEBI's market access restrictions.

SEBI had restrained ZEEL from accessing the securities market for two months and Goenka for one year in the case concerning the alleged unauthorised pledging of ZEEL's Hyderabad property to secure loans for promoter-linked entities.

During the hearing, a the coram of Presiding Officer Justice P.S. Dinesh Kumar, Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar questioned SEBI on the rationale behind imposing a two-month restriction on ZEEL.

“You are putting a ban for about two months' time…We are not able to understand that why only 2 months…you don't do this today but tomorrow you do it. Three must be some logic to that”

Counsel for SEBI replied, “The life of the order is two months and that is why I submit that after two months they can raise it by following the process”

SEBI, in its July 31, 2026 order, barred ZEEL from accessing the securities market for two months, while Goenka and former Chairman Subhash Chandra were debarred for one year.

The action followed SEBI's finding that ZEEL's Hyderabad property had been pledged as security for loans availed by promoter-linked entities without the requisite corporate approvals.

In December 2018, Chandra executed a Declaration and Acknowledgement and deposited the property's original title deeds with Indiabulls Housing Finance Limited, creating a first-ranking mortgage to secure around ₹726 crore in loans taken by four Essel Group entities.

SEBI held that the arrangement was undertaken without approval of ZEEL's Audit Committee, Board, or shareholders and was not disclosed as a related-party transaction. It also found lapses in disclosure of the contingent liability and Delhi High Court proceedings concerning the property.

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

Before the Tribunal, Zee argued that its Board had, in July, approved a ₹3,000 crore-plus fundraise through issuance of warrants, which was subsequently approved by shareholders and the stock exchanges. The stock exchange approval was granted on July 31, 2026, after which the fundraise had to be completed within 15 days, i.e. by August 14, 2026. Zee submitted that the debarment would prevent it from completing the fundraise and questioned why the company itself should be penalised for the alleged violations.

After hearing the parties, the SAT reserved its order on the interim relief sought by ZEEL and Goenka.

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