In December 2021, Zee Entertainment and Sony Pictures had agreed to merge their businesses
Today, the National Company Law Tribunal (NCLT) will reveal its verdict on the Zee-Sony merger case. The NCLT had initially held back its decision on the merger between Zee Entertainment Enterprises and Culver Max Entertainment (previously named Sony Pictures Networks India) on July 10th.
The NCLT’s Mumbai division, led by H V Subba Rao and Madhu Sinha, decided to postpone their decision after listening to concerns from creditors such as Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship regarding the proposal.
Back in December 2021, Zee Entertainment and Sony Pictures agreed to merge their operations. Subsequently, both media companies sought the tribunal’s approval for the merger after obtaining necessary clearances from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and regulatory bodies like the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI).
During Zee’s Q1 FY24 earnings call, the management expressed confidence that the merger would conclude without complications. Punit Goenka, Zee Entertainment’s CEO, clarified that his legal situation and the merger were separate issues. The company highlighted that apart from confirming his role in the merged entity, no other changes were made to the agreement.
Zee Entertainment had announced its merger with Sony Pictures Networks India (SPNI) on September 22. The announcement emphasized that SPNI had recognized Punit Goenka’s inclusion as the MD and CEO of the combined company as a crucial element of the agreement.
On June 12, a provisional directive was issued by the Securities and Exchange Board of India (SEBI) that prevented Subhash Chandra, the chairman of Essel Group, and his son Punit Goenka from taking on directorial or significant managerial roles. This was due to allegations of misusing funds from Zee for personal benefits.
The Securities Appellate Tribunal (SAT) affirmed SEBI’s interim decree, imposing a one-year restriction on Subhash Chandra and Punit Goenka, the promoters of Zee Entertainment, from occupying board positions in publicly traded firms. This decision was made on the grounds of suspected diversion of funds.