National Company Law Tribunal (“NCLT”) has issued notice on Zee Entertainment Enterprises (“Zee”) plea and merged the plea of its shareholder Mad Man Film Ventures to Culver Max (earlier Sony Pictures Network India who approached NCLT previously seeking the implementation of merger with Sony Pictures India arm.
WHAT HAS HAPPENED TILL DATE
The merger of
Culver Max
(earlier Sony Pictures Network India) and
Zee Entertainment Enterprises
was approved by NCLT in the month of
August, 2023
which would likely create a $10 Billion media industry in the country. The deal stipulated that the merger was to be completed before
December 21, 2023
, including regulatory and other approvals with a grace period of one month to complete the transaction. Sony Pictures terminated the agreement in the month of
January
and asserted that Zee did not fulfil the merger prerequisites and commenced arbitration proceedings before the
Singapore International Arbitration Centre
(“
SIAC”), seeking a termination fee of
USD 90 million (approximately ₹748.5 crore).
The
SIAC
denied interim relief to Sony citing lack of its jurisdiction which requested to stop Zee from approaching NCLT. The emergency arbitrator in Singapore has permitted Zee to pursue legal action against
Sony’s Indian subsidiaries,
Culver Max Entertainment and Bangla Entertainment,
within the Indian company court.
After getting interim relief from
SIAC
, Zee approached the NCLT and NCLT issued notice to Sony on Zee Entertainment plea and merged the plea of Zee’s shareholder named Mad Man Film Ventures, which has been termed as a proxy of the Indian broadcaster Zee, who approached NCLT previously on
January 30, 2024
seeking the implementation of merger with Sony Pictures India arm.
After NCLT’s listing of the plea, Zee’s share prices climbed out of day’s low to trade up
1.4 per cent as of 11:35
.
The Mumbai-bench of the tribunal gave directions to Sony asking the media giant to reply to ZEEL’s petition within two weeks and will hear the matter on March 12, 2024.
Zee urged the tribunal to appoint a
panel
comprising two directors each from
Zee
and
Sony
companies to oversee the implementation of the composite scheme of arrangement.
CURRENT SITUATION
Zee approached the NCLT and NCLT issued notice to Sony on Zee Entertainment plea and merged the plea of Zee’s shareholder named Mad Man Film Ventures, which has been termed as a proxy of the Indian broadcaster Zee who approached NCLT previously on
January 30, 2024
seeking the implementation of merger with Sony Pictures India arm.
The Mumbai-bench of the tribunal gave directions to Sony asking the media giant to reply to ZEEL’s petition within two weeks and will hear the matter on March 12, 2024.
ANALYSIS
According to the above case, it is apparent that Zee will have to pay termination fee of
USD 90 million (approximately ₹748.5 crore)
if the decision is in favour of Sony and merger between both the Companies will not happen. If the decision by NCLT is in favour of Zee, the merger will take place.