The practical effect would be to put the issue on hold unless Zee secures relief from SAT or another forum, lawyers said.
| Photo Credit:
Dado Ruvic
Zee Entertainment’s ₹3,143-crore promoter fund raise may not be able to proceed until the company secures legal relief from the Securities Appellate Tribunal (SAT) or the expiry of SEBI’s two-month market access ban, with the company expected to go to the tribunal soon.
The timing is difficult for the company. On the same day that the shareholders cleared the warrant issue to a promoter group entity, SEBI passed its final order in the unauthorised pledge of immovable property case, barring ZEEL from accessing the securities market for two months and restraining promoter Subhash Chandra and Managing Director Punit Goenka from dealing in securities for a year.
The order creates a regulatory bar on the transaction, and the company cannot assume that corporate approval is enough to move ahead, said Alay Razvi, Managing Partner at Accord Juris
“SEBI’s order creates a direct legal overlay on Zee’s proposed fund raise. The regulator has restrained the company from accessing the securities market for a defined period and has barred the promoters from dealing in securities. That means, on the face of the order, the company cannot proceed with issuance or allotment of warrants or other securities while the restraint is in force,” Razvi said.
Hardeep Sachdeva, Senior Partner at AZB & Partners, said, “The legal effect of SEBI’s order will ultimately depend on the precise wording of its operative directions and the stage at which the proposed preferential issue currently stands. Shareholder approval, by itself, does not grant an unconditional right to complete a capital raise. Every subsequent step must continue to comply with the Companies Act, the SEBI (ICDR) Regulations and any specific restrictions imposed by SEBI.”
“What is affected is the ability to act upon that approval during the restraint period, Tushar Agarwal,” Founder and Managing Partner at C.L.A.P. Juris, Advocates & Solicitors, said.
‘enabling instrument’
“A shareholder resolution is an enabling instrument; it is not a regulatory passport. The corporate approval may continue to exist, but its implementation remains subject to securities-law restraints operating on the issuer at the time of allotment, he said.
Anshul Verma, Partner at SKV Law Offices, said a precedent can be found in a recent Droneacharya Aerial Innovations v. SEBI case appealed in SAT.
A company under a regulatory market debarment was still permitted to proceed with a preferential share issue, but only because the tribunal specifically granted that relief while an appeal against the debarment was pending. The debarment itself didn’t get waived, the company simply obtained a carved-out exception for that one transaction, he said.
The practical effect would be to put the issue on hold unless Zee secures relief from SAT or another forum, lawyers said.
Published on August 3, 2026
