ZEE- Sony merger: NCLT to pronounce its verdict today

The National Company Law Tribunal (NCLT) will be pronouncing its decision on the merger of Zee Entertainment Enterprises and Culver Max Entertainment, previously known as Sony Pictures Networks India.
It was last month, the division bench reserved the order on the merger. The division bench heard arguments from creditors who objected to the merger scheme proposed by Zee Entertainment Enterprises and Culver Max Entertainment.
These included Axis Finance, JC Flower Asset Reconstruction, IDBI Bank, Imax Corp and IDBI Trusteeship.
In December 2021, Zee Entertainment and Sony Pictures agreed to merge their businesses.
The two media houses approached the NCLT for sanctioning the merger scheme following requisite permissions from the NSE, BSE and other regulators including the Competition Commission of India (CCI) and Securities and Exchange Board of India.
After Zee and Sony approached the NCLT, several creditors of the Punit Goenka’s Essel Group objected to the non-compete clause that was added to the merger scheme. Janak Dwarkadas, the counsel representing Zee Entertainment Enterprises Limited (ZEEL), said the scheme of arrangement between ZEEL and Sony has been approved by 99.97 per cent of shareholders of the company as well as BSE, NSE and the CCI.
The tribunal had upheld SEBI’s interim order which restrained Zee promoters Subhash Chandra and Punit Goenka from holding board positions in publicly listed companies for a year due to alleged fund diversion.
The total value of claims that is raised by creditors, who are objecting to the scheme of arrangement, is Rs 1,259 crore, he said, adding that they are holding the merger to ransom.
Dwarkadas added total public shareholding of Zee is 96.01 per cent, of which 70 per cent has been held by public institutions. He further said that around 25.88 per cent is held by public non-institutions whereas promoters hold only 3.99 per cent.
Once the verdict is out, ZEE shall get the physical copy of the order in 15 days and then file with ROC for the merger of Zee-Sony. Separately, it would go to SEBI for the de-listing of Zee shares and re-listing of the merged entity. Post NCLT approval, the process shall take 2.5-3.5 months, a report from Dolat Capital said.