Zee Group’s promoters, Subhash Chandra and Punit Goenka, are challenging India’s market regulator SEBI’s ruling that prohibited them from holding board positions in listed companies.

What Happened? Per a Reuters report, the Zee Group promoters filed a challenge with the Securities Appellate Tribunal (SAT) on Tuesday, according to insiders. SAT will resume the hearing on Thursday.

The Securities and Exchange Board of India (SEBI) enforced a year-long ban on Chandra and Goenka on Monday. SEBI accuses them of actively redirecting company funds to Zee Group’s related firms.

The shares of Zee Entertainment dropped about 7% in early trade due to concerns over a possible delay in its merger with Sony Corp‘s local unit.

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The SEBI order is under review by Zee’s board, according to a statement from Chairman R. Gopalan. He also mentioned that the company is seeking appropriate legal advice before deciding on its next steps.

If the SEBI ban continues, it could potentially delay the Zee and Sony merger further. This is particularly significant as Goenka is expected to assume the roles of managing director and chief executive of the new merged entity.

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