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.
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