Zee-Sony Merger: IDBI trusteeship appeals NCLAT against Subash Chandra

4 Dec 2023 , 12:54 PM

In a recent update on the long-going Zee-Sony Merger proceedings, IDBI trusteeship has taken a crucial step by filing an appeal to the National Company Law Appellate Tribunal against the chairperson of Essel Group, Subash Chandra. The matter was heard in a bench on December 1, 2023.

However, the hearing was deferred as the case was shifted to the bench of Chairperson Ashok Bhushan.

The appeal challenges the National Company Law Tribunal (NCLT) of Mumbai’s decision to reject its claim and approve the merger of media conglomerates Zee Entertainment Enterprises Limited (ZEEL) and Sony.  The IDBI trusteeship’s opposition to the merger was dismissed by the NCLT.

IDBI trusteeship claimed at the NCLT that it is the debenture trustee of 425 debentures issued by Essel Infraprojects Limited (EIL) for various schemes. According to the NCLT ruling, Subhash Chandra issued a personal guarantee in 2019 in favour of IDBI trusteeship guaranteeing the debt repayment obligations.

The trusteeship company, on the other hand, claimed that Chandra failed to meet his responsibilities under the personal guarantee, and so he is a creditor. Furthermore, the trusteeship business alleged that Chandra owed it more than Rs 500 crore.

ZEEL has objected, claiming that ‘IDBI Trusteeship is admittedly not a creditor of Zed.’ It has no contractual or legal relationship with Zed. As a result, it has no standing to object to the scheme (merger).’

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