Mumbai: Zee Entertainment clarified that the company is not engaged in any negotiations regarding the terminated merger deal with Sony Pictures Networks India. The firm’s declaration comes amidst reports suggesting last-minute attempts to revive the $10-billion deal that was officially called off on January 22.
Zee Entertainment and Sony Pictures Networks India had announced their merger deal over two years ago, but the deal encountered a roadblock, primarily revolving around the leadership of the combined entity. While Zee proposed its CEO, Punit Goenka, to lead the merged company, Sony disagreed, citing an ongoing probe by market regulators into Goenka’s financial conduct.
Failed Merger and Regulatory Intervention:
Sony Group Corp. terminated the merger deal last month, leading to Zee filing a petition before the Mumbai bench of the National Company Law Tribunal (NCLT), seeking a directive to implement the merger deal scheme. However, the Securities and Exchange Board of India (SEBI) intervened, issuing an interim order against Chandra and Goenka, accusing them of abusing their positions and diverting funds. SEBI further barred the duo from holding directorial or key managerial positions in any listed company.
Legal Proceedings:
Despite Zee’s move to enforce the merger through NCLT, the Singapore International Arbitration Centre (SIAC) rejected Sony Group’s plea for interim relief against Zee Entertainment Enterprises Limited (ZEEL). Sony sought to restrain ZEEL from moving NCLT in connection with the failed merger of its subsidiary, Culver Max, with the Indian media house.
Financial Fallout:
SEBI emphasized a significant decline in ZEEL’s share price, from almost ₹600 per share to the current value of less than ₹200 per share during the financial years 2018-19 to 2022-23. The regulator alleged that Chandra and Goenka “alienated” assets for the benefit of entities owned and controlled by them.
Contrary to recent reports, Zee Entertainment asserted that it is not involved in any negotiations with Sony to revive the merger deal. Both parties had reportedly held meetings in Mumbai over the past fortnight, aiming to reach an out-of-court settlement to resolve their ongoing dispute.