NCLAT defers hearing of Zee Entertainment's plea over Sony merger approval to Friday

The hearing on Zee Entertainment's petition challenging the National Company Law Tribunal (NCLT) order has been postponed until Friday by the National Company Law Appellate Tribunal (NCLAT), which has also directed the bourses NSE and BSE to rethink its approval of the company's merger with Culver Max Entertainment, news agency PTI reported.

On Thursday, a two-member NCLAT bench ordered the lawyer for Zee Entertainment Enterprise Ltd (ZEEL) to fix errors in the petition and directed them to list the matter for the next day for hearing.

The appellate tribunal was hearing the appeal filed by ZEEL against the order passed by the Mumbai bench of the NCLT on May 11, 2023.

The NCLT had directed NSE and BSE to reconsider their prior approvals for the merger of ZEEL and Culver Max Entertainment (earlier known as Sony Pictures Networks India). It had also asked the bourses to reassess the non-compete fee under the merger clause.

The said order was challenged by ZEEL before the appellate tribunal, contending that the NCLT did not grant it adequate opportunity to present its side and it didn't follow the principles of natural justice.

Moreover, it also contended that the NCLT doesn't have jurisdiction over non-compete issues.

As per the scheme of the arrangement, Sony will indirectly hold 50.86 per cent of the combined company. The founder of Zee will own around 4 per cent rest will be with the other shareholders of ZEEL.

Sony Group will also pay the Essel Group promoters a non-compete fee of Rs 1,100 crore.

Earlier this month, Japanese conglomerate Sony Group Corporation Chairman and CEO Kenichiro Yoshida said he expects the merger to complete within the fiscal first half.

In September 2021, Sony Pictures Networks India and ZEEL entered a non-binding term sheet to bring together their linear networks, digital assets, production operations and programme libraries.

The combined entity will own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV) and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.

(With PTI inputs)