The National Company Law Tribunal (NCLT) adjourned the hearing in the scheme of arrangement between Walt Disney-owned Star India and its subsidiary Novi Digital Entertainment, which owns the streaming platform Disney+ Hotstar, to March 27.
The hearing was postponed on February 21 because the Indian Performing Right Society (IPRS), which opposes the scheme, has informed the NCLT that its application challenging the tribunal’s dismissal order dated February 9 has been held for judgment by the National Company Law Appellate Tribunal (NCLAT).
The NCLT also said that Novi Digital Entertainment and Star India can mention the scheme if the NCLAT pronounces its judgment before the next date of hearing.
The development comes at a time when Walt Disney and Reliance Industries have reached an agreement to merge Star India and Viacom18.
On February 9, the NCLT dismissed the IPRS’ application challenging the legal validity of the scheme of arrangement between Star India and Novi Digital Entertainment. The IPRS, which claims to be an unsecured creditor of both entities, had contended that the two parties had gone ahead with the scheme of arrangement without its consent.
The NCLT had ruled that postponing or staying the scheme’s process based on IPRS’ claims would not be appropriate as its locus to object to the scheme had not been established.
It also said that the proposed scheme provides sufficient scope for IPRS’ interests to be protected in the event its credentials as a creditor get established.
The IPRS has claimed dues of Rs 128 crore from Star India and Novi Digital Entertainment for the period April 2018 to March 2023 as per its published tariff.
On February 21, the NCLAT reserved its judgment after hearing the counsels of Star India, Novi Digital Entertainment and IPRS in full. It also asked the parties to submit their notes of submissions and citations to the office of the registry through e-filing within three working days.
As per the scheme of arrangement, Novi Digital Entertainment will get amalgamated into Star India, a move that will help the Walt Disney-owned company achieve economies of scale, enable synergies, increase operational efficiencies, put a greater emphasis on growth, make the best use of resources and lower costs.
In meetings held on February 8, 2023, the boards of both Star India and Novi Digital Entertainment accepted the merger plan with effect from April 1, 2022.
Source: Economic Times