SAT questions Sebi’s two-month ban on Zee; reserves interim order

While no immediate relief was pronounced, the tribunal questioned the rationale behind the 60-day restraint on Zee, asking Sebi what would materially change after two months.

“If Zee can access the market after 60 days, what changes during those two months?” the tribunal asked.

SAT also asked why the company had been debarred when Zee itself had not been charged with fraud. Zee is in the middle of a shareholder-approved Rs 3,143.5-crore preferential issue of fully convertible warrants to promoter group entity Sunbright Mauritius Investments.

The proposed issue involves up to 249.5 million warrants at Rs 126 each. If fully converted, it could take promoter shareholding in Zee from 3.99% to nearly 24%. The promoter entity is required to pay 25% at subscription and the balance at conversion over 18 months.

The transaction was approved by shareholders at Zee’s extraordinary general meeting on July 31. That was also the day Sebi signed its final order against the company and promoters Subhash Chandra and Punit Goenka over the alleged unauthorised pledge of Zee-owned land in Hyderabad as security for borrowings by promoter-linked Essel Group entities..

Senior advocate Ravi Kadam, appearing for Zee, told the tribunal that Sebi had closed the matter for a final order in December 2025.

According to his submissions, the order was signed at 9.04 pm on July 31 and appeared in news reports later that night, but was served on the company only at around 8 pm on August 1. SAT also raised questions over the manner in which the order was served on the noticees.

Kadam urged SAT to prevent the Sebi order from disrupting implementation of the resolutions cleared by shareholders on July 31. He also sought protection for the 14-day window available for the preferential warrant process, arguing that the clock should run from the date SAT pronounces its interim order.