ZEE-Sony merger: Supreme Court to hear IDBI Trusteeship's petition opposing deal

In a latest development in the proposed merger deal between Zee Entertainment Enterprises Ltd (ZEEL) and Sony, the Supreme Court will hear the petition of IDBI Trusteeship against the September 2023 order by the National Company Law Appellate Tribunal (NCLAT), wherein it rejected IDBI Trusteeship’s insolvency plea against two promoter companies of ZEEL.

As per media reports, the Supreme Court has issued notices to these two promoter companies – Cyquator Media Services and Direct Media Distribution Ventures, who will have to reply to the court’s notice within four weeks. Media reports further state that a bench led by Chief Justice DY Chandrachud has said that the next hearing is scheduled after four weeks.

IDBI Trusteeship had earlier petitioned to the NCLAT against the approval given by National Company Law Tribunal (NCLT) to the ZEE-Sony merger, rejecting IDBI Trusteeship’s objection to the merger. IDBI Trusteeship petitioned that is the debenture trustee of 425 debentures issued by Essel Infraprojects. IDBI Trusteeship stated that Subhash Chandra had executed a personal guarantee in 2019 in favour of IDBI trusteeship guaranteeing the repayment obligations towards the debentures. However, Chandra didn’t comply with his obligations under the personal guarantee and thus he is a creditor, alleged IDBI Trusteeship, claiming that Chandra owed it Rs 500 crore.

Opposing IDBI Trusteeship’s objection, ZEEL argued that “IDBI Trusteeship is admittedly not a creditor of Zee, and so it has no right to object to the merger.”