NCLT to hear Zee Entertainment’s plea for Sony merger implementation on March 12

The National Company Law Tribunal (NCLT) granted approval to Zee Entertainment’s plea for the implementation of the now terminated merger with Sony’s India entity, Culver Max Pvt Ltd. The decision, made on January 30, mandates Sony Group entities to respond within three weeks to a notice issued by NCLT, relating to the plea filed by Zee shareholders, Mad Men Film Ventures, advocating for the merger’s execution.

The NCLT has scheduled the next hearing for March 12, marking a significant step in the ongoing saga that unfolded nearly a week after Sony Group Entities terminated the two-year-long merger negotiations with Zee. The Japanese entertainment giant cited Zee’s alleged inability to fulfill the merger agreement as the reason for the termination.

In response to Sony’s move, Zee Entertainment has taken a legal course of action by denying any breach of obligations under the merger cooperation agreement (MCA). Zee asserts that it has complied with all its obligations in “good faith.” Concurrently, Zee’s promoter, Subhash Chandra, is reportedly contemplating criminal action against Sony Group, adding another layer of complexity to the fallout of the failed merger.

Zee Entertainment’s reply to Culver Max and Bangla Entertainment Private Limited (BEPL), emphasized its commitment to the terms of the merger agreement. Moreover, reports suggest that the promoter family is considering increasing their stake in the domestic entertainment giant from 4% to 26%.

Emergency Arbitration on January 31

The aftermath of the terminated merger has led Sony Group Corp to approach the Singapore International Arbitration Centre (SIAC) for emergency arbitration. Sony seeks a termination fee of 90 million USD from Zee, citing alleged breaches of the agreement. The first hearing for the emergency arbitration is scheduled for January 31.

The terminated merger between Sony and Zee Entertainment, a deal that could have created a 10 billion USD media enterprise in India, resulted from a stalemate over leadership of the merged entity. The agreement stipulated completion before December 21, 2023, inclusive of regulatory approvals, with a grace period of one month for the transaction’s conclusion.