The Mumbai bench of the National Company Law Tribunal (NCLT) gave Sony Group Corp. entities three weeks to respond to a plea filed by a shareholder of Zee Entertainment Enterprises seeking the implementation of the merger scheme between the two companies.
Mad Man Film Ventures, one of the shareholders of Zee, has sought the NCLT’s intervention to implement the merger scheme, which was terminated by Sony Group companies on January 22, citing non-fulfilment of closing conditions by Zee.
The division bench of judicial member Lakshmi Gurung and a technical member, Charanjeet Singh Gulati, while allowing the Sony Group companies Culver Max Entertainment and Bangla Entertainment three weeks to file their reply, has adjourned the matter to March 12.
Before that, Senior Counsel Darius Khambata appeared for the Sony Group companies, arguing that this application is nothing but a ‘proxy of Zee’.
“The scheme was conditional, based on various regulatory approvals and other pre-conditions between parties. The scheme explicitly said that it would become effective on the date of the last date of fulfilling all the conditionalities,” argued Khambata.
“It is our case that some of the pre-conditions have not been complied with, and hence the merger is not complete.”
Counsel for Mad Man Film argued that the company is a shareholder of Zee Entertainment and has filed this application for the implementation of this merger scheme.
Janak Dwarkadas, senior counsel for Zee, contended that they would decide whether or not to file their response in this application at a later date, given that the company has already filed an application with the NCLT for direction to implement the merger scheme.
Sony terminated its merger agreement with Zee on January 22, demanding a $90 million termination fee from Zee and seeking emergency interim relief. The merger was terminated due to disagreements over the leadership of the merged entity and unfulfilled closing conditions by Zee.
Sony Group’s Culver Max Entertainment and Bangla Entertainment initiated arbitration against Zee Entertainment Enterprises, while Zee contested charges and sought direction from the NCLT for implementation of the merger agreement.
Sony and Zee’s 2021 merger agreement, despite receiving clearances from stock exchanges, the Competition Commission of India, and the NCLT, failed to materialise after two years.
The merger, if successful, would have created a media giant with a topline of Rs 15,000 crore and robust TV and digital assets.
Source: Economic Times