Axis Finance Ltd (AFL) has requested Raj Kamal Saraogi, the resolution professional overseeing personal insolvency proceeding against Subhash Chandra, to intervene and stop the amalgamation scheme between Zee Entertainment, Culver Max Entertainment (Sony) and Bangla Entertainment, a subsidiary of Sony.
In a communication to Saraogi, AFL, the non-banking financial arm of Axis Bank, said Chandra’s Essel Mauritius has entered into a non-compete agreement with SPE Mauritius Investments, a Sony group company, as part of the merger deal between Sony and Zee, adding that the non-compete agreement runs contrary to a Supreme Court order of August 5, 2022.
Under the agreement between the two companies, SPE Mauritius Investments will pay a non-compete fee of Rs 1,100 crore to Essel Mauritius, an Essel Group company, it said.
The Supreme Court, which is yet to pass a final order in the matter, has restrained Chandra from alienating or disposing of any assets or legal rights, or beneficial rights.
The National Company Law Tribunal (NCLT), New Delhi, had appointed Saraogi as resolution professional to initiate an insolvency resolution process against Chandra on an appeal filed by Indiabulls Housing Finance Ltd (IHFL) on May 30, 2022.
AFL, in its communication to the RP, said it has filed an intervention application in the NCLT to oppose the scheme of merger between Zee, Sony, and Bangla Entertainment.
“We hope that you would take appropriate and preventive steps to intervene in the said company application for the approval of the scheme,” it said.
ET has reviewed a copy of the communication.
Zee, Sony, and Bangla Entertainment have filed an application seeking NCLT’s approval for the scheme of arrangement between the three companies.
The scheme of arrangement was last listed for hearing on December 15. The tribunal is yet to give its final approval for the same.
AFL’s interim application before the Bombay High Court came up for hearing on December 14.
The court has granted two weeks to Zee Group entities to file a reply. Rejoinder can be filed within two weeks thereafter. The application is listed for hearing on January 16.
Axis Finance had in January this year served a legal notice to Zee and its promoters seeking ₹146 crore in dues, and moved the Bombay High Court against the Zee promoters for recovery of dues.
