No action against Subhash Chandra on summons till April 30: Sebi to HC

Delhi: The Securities and Exchange Board of India (Sebi) informed the Bombay High Court on Wednesday that it will not take any action regarding the summons issued to Subhash Chandra, Chairman Emeritus of Zee Entertainment Enterprises, in an alleged fund diversion case until April 30. Chandra has been requested to file a rejoinder.

Chandra approached the high court on January 5 regarding the matter. He contended that the summons issued by Sebi were unprecedented and framed allegations in a manner that suggested his guilt had already been conclusively established. Chandra requested the court to declare the summons as "illegal and void" due to alleged "predetermination, arbitrariness, unfairness, bias."

In January, Sebi stated that it had issued multiple summons to Chandra to engage him in its investigation regarding the alleged fund diversion case, but Chandra did not respond. In its probe in June of the previous year, Sebi alleged that Rs 200 crore worth of funds were diverted through related party transactions from Zee.

In his petition, Chandra argued that Sebi’s summons appeared to have already predetermined his guilt during the investigation stage, without following due process or principles of natural justice, suggesting the ongoing investigation was a mere formality.

Subsequently, Sebi informed the court it would hold off on acting upon the summons for three weeks. Additionally, Chandra has requested the court to prevent Sebi from issuing a final investigative report.

A bench led by Justice G.S. Kulkarni and Justice Firdosh Pooniwala were reviewing Chandra’s petition against the summons issued by the markets regulator.