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ZEEL makes another attempt to save $10 billion merger; Sony given 3 weeks to respond

ByVaishnawi Sinha
Jan 30, 2024 10:56 PM IST

ZEEL shareholders have entered yet another petition in the NCLT seeking the enforcement of the now-cancelled merger with Sony Group.

Making a last-ditch attempt to make the deal a reality, the shareholders of Zee Entertainment Enterprises Limited (ZEEL) have filed another petition in the National Company Law Tribunal (NCLT), seeking the enforcement of the now-cancelled merger with Sony Group.

Sony called off its merger with ZEEL last week (Reuters)

The petition was filed before a Mumbai bench of NCLT, which further directed Sony Pictures Network India, now known as Culver Max, to file a reply within three weeks. The next hearing for the case has been kept on March 12.

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This comes a week after Sony Group sent a notice to ZEEL, terminating the merger between the two entities on January 21. The mega-merger worth $10 billion was called off, and Sony Group sought USD 90 million for breach of conditions besides initiating arbitration from ZEEL.

The latest NCLT notice came on a petition filed by Mad Men Film Ventures, a shareholder of ZEEL. Mad Men Film Ventures earlier sent an application requesting both ZEEL and Sony to implement the merger deal as it was approved by the NCLT in August 2023.

Earlier, Sony had sent the termination notice to Zee Entertainment saying that the latter had violated certain terms of the merger. Sony alleged that ZEEL failed to meet some financial terms of the merger, and did not come up with a plan to address them.

However, Zee denied these allegations put forward by Sony in a letter, accusing the Japanese company of "bad faith" in calling off the merger, reported Reuters. A Zee-Sony merger in India would have created a media powerhouse in the world's most populous nation with 90-plus channels across sports, entertainment and news.

Leadership dispute in ZEEL-Sony merger

Before the merger was called off by Sony Group, there were speculations that the two entities have a difference of opinion over who will be appointed as the top leadership in ZEEL-Sony's merged entity.

Shyam Kapadia, counsel to the ZEEL shareholder, said, "From media reports it appears that there was a dispute between ZEE and Sony on who would lead the resulting company post the merger, even though the scheme of arrangement (merger) clarified who would head the merger."

Darius Khambata, who represented Sony, urged the tribunal to dismiss the Mad Men Film Ventures' plea saying that it was not maintainable. "It is crystal clear, not only from the application, but also from the affidavit we received yesterday from the shareholder, that he was nothing but a proxy for ZEE," he argued.

(With inputs from PTI)

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