The National Company Law Appellate Tribunal (NCLAT) on Friday granted interim relief to Zee Entertainment Enterprises Ltd (ZEEL), staying bankruptcy proceedings against the media company. This follows the National Company Law Tribunal (NCLT) admitting an insolvency plea filed by creditor IndusInd Bank – a move that threatens to disrupt Zee’s merger with Sony.
The appellate tribunal has posted the matter for hearing on March 29. Zee Entertainment managing director Punit Goenka on Thursday petitioned NCLAT for relief from the February 22 NCLT order.
“We respect the decision taken by the Honourable National Company Law Appellate Tribunal and remain committed towards protecting the interests of all stakeholders,” Goenka said in a statement. “Our focus continues to be on the timely completion of the proposed merger.”
ZEEL stock fell 1.6% to ₹195.60 at the close on the BSE on Friday, having dropped 15% intraday on Thursday following the NCLT move.
Zee’s plea was heard by a division bench of Justice Ashok Bhushan and technical member Barun Mitra. In its oral order, the bench directed private sector lender IndusInd Bank to file its response within two weeks, while a rejoinder can be filed two weeks after that. Senior advocate Mukul Rohatgi appeared for Goenka, while IndusInd Bank was represented by senior advocate Rajiv Nayar.
The bankruptcy court had admitted Zee Entertainment under the corporate insolvency resolution process (CIRP) on a plea by IndusInd Bank, which is seeking to recover ₹83.1 crore in dues from the company. It had also appointed Sanjeev Kumar Jalan as the resolution professional for ZEEL.
‘IndusInd Bank may Move SC’
AEKOM Legal cofounder NPS Chawla said IndusInd Bank can challenge the NCLAT order in the SC.
“IndusInd Bank may go in appeal against this order of stay before the Supreme Court since during the hearing today, the submission of IndusInd Bank for directing ZEEL to deposit some part of their admitted dues was not acceded to by NCLAT,” said Chawla. “This stay order certainly will give a breather to all the investors of ZEEL. The order of admitting ZEEL into insolvency created a concern, particularly the impact on the pending merger of ZEEL with Sony.” While challenging the NCLT order, Goenka stated that he was taking all the necessary steps under law to achieve timely completion of the proposed merger with Culver Max Entertainment (Sony).
Legal experts told ET that proceedings in the bankruptcy courts have the potential to delay the deal between Zee and Sony.
