Bombay HC Sides With Zee's Subhash Chandra, Invalidates SEBI Summons
Bombay High Court acknowledges bias concerns, SEBI to reassign the case to ensure impartiality in future proceedings
The Bombay High Court has ruled in favour of Dr Subhash Chandra, Chairman Emeritus of Zee Entertainment Enterprises (ZEEL) in his challenge against a summons issued by the Securities and Exchange Board of India (SEBI).
Dr Chandra, also a former Member of Rajya Sabha had filed a writ petition contesting the validity of SEBI's summons dated January 12, 2024. The court accepted his arguments that the summons failed to comply with the provisions of the SEBI Act, contained pre-determined allegations and effectively functioned as a show cause notice rather than a fact-finding inquiry.
The court also acknowledged Dr Chandra's concerns regarding potential bias within SEBI. These concerns were not without precedent as the Securities Appellate Tribunal (SAT) had previously made observations on this matter. In response, SEBI has taken the unusual step of informing the court that future orders related to Dr Chandra and ZEEL will be passed by an official other than Whole Time Member Ashwani Bhatia to ensure impartiality.
The High Court has advised Dr Chandra not to respond to the January 12 summons. Instead, he has been directed to provide only the information and documents requested in SEBI's subsequent communication dated March 27, 2024 and only to the extent that such materials are available to him.
