New Delhi: IDBI Bank has moved the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal’s (NCLT) decision to approve the merger of Zee Entertainment and Sony Pictures Network India. Zee Entertainment informed the stock exchanges about this development. The NCLT had given its nod to the Zee-Sony deal on August 10.
The tribunal had reserved its verdict on July 10. The NCLT had dismissed the objections raised by lenders such as IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Company, and IMAX Corp. and cleared the deal on August 10. Zee and Sony had announced their merger plan in December 2021. After getting clearance from NSE, BSE, SEBI, and CCI, the company sought the tribunal’s final approval for the merger.
What is the issue?
Several creditors of Essel Group had objected to the payment of Rs 1,100 crore as a non-compete fee to Essel Mauritius, a subsidiary of Essel Group, by Sony Group’s SPE Mauritius under the scheme. The creditors, namely Axis Finance Limited, JC Flowers Asset Reconstruction, IDBI Bank, IDBI Trusteeship, and Emax Corp, had alleged that this clause was a fraud on the creditors. However, NCLT rejected all these objections. Now IDBI Bank has appealed to NCLAT against the NCLT order.
The merger will create a new company
Zee Entertainment and Sony Pictures Networks India will merge to form a new company. Both will invest Rs 11,605.94 crore in the new company. After the merger, Zee Entertainment will have a 47.07 percent stake, while Sony Pictures will have a 52.93 percent stake in the new company. The merged company will also be listed on the stock market. Sony Pictures Networks India has been in the entertainment business in India for a long time. The company launched its first channel Sony Entertainment Television in India in 1995. ZEEL started its first channel Zee TV on October 2, 1992.
