NCLT GreenLights Mega-Merger of Zee And Sony
Mumbai: The National Company Law Tribunal (NCLT) has granted its endorsement for the proposed merger between Zee Entertainment Enterprises, India’s prominent entertainment company, and Culver Max Entertainment (formerly known as Sony Pictures Networks India or SPNI).
In a recent development, the esteemed bench consisting of Justice HV Subba Rao and member Madhu Sinha announced their approval of the merger scheme. They effectively dismissed all objections raised by certain creditors, which included Axis Finance, JC Flowers Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship.
The official order is scheduled for upload on the NCLT website by Friday, in line with the bench’s decision following their reserved order on the matter on July 10th.
This favorable verdict paves the way for the two corporate entities to initiate their integration process, expected to commence as early as the coming week. ZEE will undertake the necessary steps to file with the registrar of companies within a span of 30 days. Subsequent to this, the company’s shares will be delisted from stock exchanges, and the merged entity will undergo relisting within an estimated six-week timeframe.
Though neither of the merging companies has released a formal statement indicating the projected completion date of the merger, experts in the domain of mergers and acquisitions anticipate that the process will likely conclude by mid-November.
Concurrently, ZEE awaits a favorable ruling from the Securities and Exchange Board of India (SEBI), the regulatory body overseeing the securities market. This follows a previous SEBI ruling that temporarily barred Punit Goenka, ZEE’s MD and CEO, from occupying any significant managerial role within a publicly listed corporation.
Among the stipulations tied to the merger is Goenka’s continuation as the MD and CEO of the amalgamated enterprise. While Goenka acknowledged the legal intricacies, he affirmed his commitment to ensuring the merger’s successful culmination. In his words, “The merger is of paramount significance to me. I am unwaveringly focused on its realization. The merger’s success remains a priority, regardless of my role as CEO.”
In an intriguing turn of events, following an intervention from the Securities Appellate Tribunal, the Sebi chairperson examined Goenka’s response in reference to the ex-parte order issued by the regulatory authority on July 12th. Sebi is anticipated to render its final decision on the matter by Monday, August 14th. A positive outcome from Sebi would secure Goenka’s leadership as the MD and CEO of the nation’s second-largest entertainment network.
About NCLT:
Established on June 1, 2016, under the guidelines of the Companies Act 2013 (Section 408), the National Company Law Tribunal (NCLT) stands as a quasi-judicial institution entrusted with the task of addressing corporate concerns within India. This regulatory body was brought into existence by the Indian government to oversee and deliberate upon matters pertaining to companies operating in the nation.
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