NCLT to Announce Verdict on Zee-Sony Merger Today Amidst Regulatory Scrutiny

10 Aug 2023 , 01:18 PM

The National Company Law Tribunal (NCLT) is scheduled to deliver its verdict on the Zee-Sony merger case today. The NCLT had reserved its decision on the merger between Zee Entertainment Enterprises and Culver Max Entertainment (formerly Sony Pictures Networks India) on July 10.

The Mumbai bench of NCLT, consisting of H V Subba Rao and Madhu Sinha, reserved the judgment after considering objections from creditors including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship, who raised concerns about the scheme.

Zee Entertainment and Sony Pictures reached a merger agreement in December 2021, leading both companies to seek approval from the tribunal for the merger. Approvals were obtained from regulatory bodies such as the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Competition Commission of India (CCI), and Securities and Exchange Board of India (SEBI).

During Zee’s Q1 FY24 earnings call, management expressed confidence in a smooth merger process. Punit Goenka, Zee Entertainment’s CEO, clarified the distinction between his legal situation and the merger, highlighting his continued role in the merged entity.

The merger, announced on September 22, emphasized Punit Goenka’s inclusion as MD and CEO of the combined company.

A temporary SEBI order on June 12 restricted Subhash Chandra and Punit Goenka from directorial or major managerial positions due to alleged misuse of Zee’s funds for personal gain.

The Securities Appellate Tribunal (SAT) upheld SEBI’s interim order, imposing a one-year restraint on Zee Entertainment promoters Subhash Chandra and Punit Goenka from holding board positions in publicly listed companies, citing alleged fund diversion.

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