Zee Sony merger: Media giant Subhash Chandra’s Zee Entertainment approached a corporate dispute tribunal on Wednesday to get Sony to honor its US$10 billion merger deal, even as the Japanese media giant vowed it would thrive in India despite the aborted merger. Will swell.

Days before Sony Group put the merger on hold following a standoff over who would head the merged entity, Zee Group founder Chandra wrote to Finance Minister Nirmala Sitharaman and sent a notice to market regulator SEBI to “disrupt” the deal. Was accused of trying to. Right in the middle of negotiations in a case related to alleged fund diversion by Zee promoters.

Sony had opposed the demand of Zee chief executive and Chandra’s son Punit Goenka, who was investigated by SEBI on fraud charges, to stay on after the merger.

In a stock exchange filing, Zee denied Sony’s claims that it has breached its obligations under the deal, and said it has initiated legal action to counter the claims in arbitration proceedings before the Singapore International Arbitration Centre. .

It also approached the Mumbai-bench of the National Company Law Tribunal to force Sony to honor the deal that was initially agreed upon two years ago.

Separately, the head of Sony’s India unit wrote a letter to its employees, assuring them that the company will continue to thrive despite its aborted merger with Zee Entertainment Enterprises Ltd.

US$90 million claim by Sony

According to a regulatory update from Zee Entertainment Enterprise Limited (ZEEL), Zee has also initiated appropriate legal action to counter the USD 90 million (Rs 748.5 crore) claims filed by Sony Group before the Singapore International Arbitration Center (SIAC). Is of.

It claims that Sony group firms Culver Max and BEPL (Bangla Entertainment Private Limited), which were to be merged with ZEEL, are in default in their obligations to execute and implement the scheme of merger approved by the NCLT.

“The company approached the NCLT, Mumbai bench, inter alia, seeking directions to implement the scheme of merger,” ZEEL said.

NCLT on August 10, 2023 approved the scheme of merger of ZEEL with Sony group units Culver Max Entertainment (formerly known as Sony Pictures Networks India) and BEPL.

“The company has asked Culver Max and BEPL to immediately withdraw the termination and confirm that they will comply with their obligations to give effect to and implement the scheme of merger approved by NCLT,” it said.

Furthermore, the Chandra family-promoted media entity has denied all allegations by Sony Group of violating the merger agreement and said the termination fee claimed by the Japanese firm is “legally untenable” and has no basis.

A regulatory filing by Zee Entertainment Enterprise said it is “evaluating all available options” based on guidance received from its board.

“The company initiated appropriate legal action to counter the claims of Culver Max and BEPL in the arbitration proceedings before SIAC,” it said.

termination decision

On Monday, Sony Picture Network India (SPNI) and BEPL’s Japanese parent Sony Group Corp (SGC) announced the termination of the US$10 billion merger agreement with ZEEL over breach of terms, besides initiating arbitration. Demanded 90 million US dollars. ,

The SGC had said that despite engaging in discussions to extend the last date of completion of the transaction, ZEEL did not fulfill the merger conditions.

Responding to this, ZEEL said, “The Company categorically denies all claims and assertions made by Culver Max and BEPL in relation to the alleged violations of the MCA, including their claims for termination fees, and reserves its rights in this matter.”

ZEEL further said that it is evaluating all available options.

This also includes “taking appropriate legal action and opposing the claims of Culver Max and BEPL in the arbitration proceedings.”

In a letter to the Finance Minister dated January 16, Chandra alleged that SEBI was “acting with a premeditated mind”, and sought steps “to protect the interests of minority shareholders of ZEEL”.

He said ZEEL and all others are cooperating in the investigation related to alleged fund diversion by the promoters and expressed concern over a new notice issued by the markets regulator to the former directors of ZEEL.

Chandra alleged that the regulator was acting with bias, referring to the order passed by the appellate tribunal SAT, where Sebi had challenged the order barring him and his son Punit Goenka from holding key positions in any listed entity. It was given and it was banned. Brain.

According to the agreement, Sony planned to invest US$1.575 billion in the merged entity and hold a majority stake of 52.93 percent.

‘The country’s largest entertainment network’

If the Sony-Zee merger is completed, the combined entity will own more than 70 TV channels, two video streaming services – ZEE5 and Sony LIV – and two film studios – Zee Studios and Sony Pictures Films India – making it the most Will become a big entertainment network. Country.

In a letter to employees, SPNI Managing Director and CEO NP Singh asked them to focus on current projects with the immediate goal of unleashing the company’s full potential, continuing to create content that not only engages the audience but but also increases customer growth and revenue.

“As we close the chapter on our proposed merger with ZEEL, I want to take some time to talk to you – not only as your CEO but as someone who has been on this journey with you Is. “This change in our plans allows us to step into a new phase of our story, which I believe is full of promise,” Singh wrote in the letter.

‘Sign from the Lord’

Punit Goenka, one of the special guests invited to the Ram Mandir Pran Pratistha ceremony on January 22, hinted at the company’s latest developments in a post on X, calling them “a divine sign”.

Goenka posted, “As I reached Ayodhya early this morning for the auspicious occasion of Pran Pratistha, I got a message that the deal I have spent 2 years imagining and working on has been finalized with my best and most honest efforts. has failed despite.”

“I believe this is a sign from the Lord. I pledge to move forward positively and work towards strengthening India’s leading M&E company for all its stakeholders.”

(With PTI inputs)