Merger deal between Zee Entertainment and Sony to be implemented through NCLT

In a bid to get permission to proceed with the merger with the Indian division of Sony Group Corp., Zee Entertainment Enterprises Ltd. submitted a request with the National Company Law Tribunal.

According to an exchange filing on Wednesday, Zee responded to Sony Pictures Networks India Pvt., rejecting any infraction of the MCA and repeating that the business has met with all of its responsibilities in good faith.

Sony Pictures, which is currently known as Culver Max Entertainment Pvt., sent out a notice to Zee dissolving the final agreements they had signed.

Zee has rejected Culver and Bangla Entertainment Pvt.’s claim that they have the right to end the MCA, saying that the $90 million termination fee “is legally untenable and has no basis whatsoever”.

In the arbitration procedures before the Singapore International Arbitration Centre, Zee has filed the proper legal action to reject Culver and BEPL’s allegations, the statement stated.

In a letter to Union Finance Minister Nirmala Sitharaman, Zee promoter Subhash Chandra accused SEBI of attempting to block the conglomerate’s merger with the Japanese business.

Chandra said that the capital markets regulator had been acting with a “predetermined mind” in a letter dated January 16 that NDTV Profit had reviewed. Chandra then asked Sitharaman to step in and protect the interests of minority shareholders.

Whether Punit Goenka will take the leadership of the merged company has been the main concern. Due to claims of fund diversion, the Securities and Exchange Board of India has barred him from having a significant managerial role. The Securities Appellate Tribunal granted him relief, but the regulatory investigation is still ongoing.

The Sony Group has earlier denied two of Zee’s bids, according to a report by NDTV Profit. The initial plan called for Goenka to lead the combined company after the merger was approved by the shareholders. The next step would be to collectively search for a “neutral” CEO who could lead the organization and win over both sides.

The second suggestion was for Goenka to continue serving on the board but resign his role as CEO. As a substitute, a promoter nominee was also offered a board seat. NDTV Profit found out that Sony turned down both of these ideas.

Zee’s stock fell more than 30% on Tuesday when the agreement was terminated, but it rebounded on Wednesday.

Zee’s stock ended the day 6.70% higher at Rs 166.35 per share, outperforming the benchmark BSE Sensex’s 0.98% gain.