The SEBI order was passed after noting that Chandra and Goenka (noticees) had abused their position as directors of a listed company for siphoning off funds for their own benefit and alienated the assets of ZEEL and other listed companies of the Essel Group for the benefit of associate entities owned and controlled by them.
The siphoning off appeared to be a well-planned scheme, the SEBI said.
The market regulator had also noted that the disclosure in the Annual Report regarding payments from associate entities also appeared to be a misstatement or a misrepresentation.
The noticees created a façade through sham entries to misrepresent to the investors as well as the regulator that money had been returned by associate entities, whereas in reality, it was ZEEL’s own funds that was rotated through multiple layers to finally end in ZEEL’s account.
“The noticees have attempted to ride piggyback on the success of ZEEL, the flagship company of Essel Group, to bankroll the associate entities, which are owned and controlled by them,” the SEBI order had stated.
Source: Barandbench
