Zee Entertainment Group (ZEEL) has formally requested an extension of the merger deadline with Sony Group Corporation, which is set for December 21. In compliance with the Merger Cooperation Agreement established on December 22, 2021, Zee Group has reached out to Culver Max Entertainment Private Limited (CMEPL) and Bangla Entertainment Private Limited (BEPL) seeking an extension to make the merger scheme effective, as disclosed in the company’s recent stock exchange filing.
The merger agreement between Zee Entertainment and Sony, initiated in December 2021 with the aim of creating India’s largest entertainment conglomerate, is currently facing challenges. Despite obtaining all necessary approvals, the completion of the merger has been delayed due to disagreements between the two companies regarding the appointment of the CEO for the merged entity.
An additional hurdle arose as two independent directors, Sasha Mirchandani and Vivek Mehra, failed to secure re-appointment to Zee Entertainment’s board. This development occurred against the backdrop of the impending merger deadline with Sony Group Corp.’s India unit.
The central point of contention revolves around the choice of CEO for the new entity. Zee is advocating for the continuation of the agreement signed in 2021, which designates Zee Chief Executive Officer Punit Goenka, the son of Zee founder Subhash Chandra, as the head of the merged company. However, Sony is expressing reservations about appointing Goenka, citing an ongoing regulatory probe against him, as reported by Bloomberg, based on information from sources familiar with the matter.
Additionally, the resignation of non-executive director Adesh Gupta was announced on Thursday. Gupta cited personal reasons for stepping down from his position, as disclosed in the company’s stock exchange filing. These recent developments underscore the challenges faced by Zee Entertainment and Sony in achieving a consensus and meeting the impending merger deadline.