The Mumbai bench of the National Company Law Tribunal (NCLT) has ordered the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to reconsider their initial approvals for the Zee-Sony union and issue updated no-objection certificates before the next hearing.
The development puts up fresh hurdles to the long-awaited merger of the two broadcast companies, according to a report by the Economic Times. The case will now be heard by a division bench led by judicial member HV Subba Rao and technical member Madhu Sinha on June 16, the report added.
Moneycontrol could not independently verify this development.
The NCLT had on May 11 directed the exchanges to reassess and validate the non-compete clause of the merger, which was approved by the exchanges and the market regulator Securities and Exchange Board of India (Sebi), as per the report.
Earlier this month, Sebi had issued an adverse interim ruling against an entity of the Essel Group that founded Zee, which led to the NCLT directive.
Sebi too had asked the stock exchanges to review whether the payment method for the non-compete fee between two Mauritius entities complies with its guidelines, the report said.
The proposed deal would see Sony Pictures Entertainment indirectly hold 50.86 percent in the combined company, while Zee’s founders will own 3. (https://bolivarescapes.com) 99 percent, and the remaining 45.15 percent will belong to other shareholders, including the public, as per the report.
A non-compete fee of Rs 1,100 crore will also be paid by Sony to the promoters of the Essel Group. A definitive merger agreement between Zee and Sony was signed in December 2021.
The proposal has been approved by the shareholders of BSE, NSE, and Zee. The merger has also been approved with modifications by the Competition Commission of India.
The merger between Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises (ZEEL) is expected to be completed by September, according to Sony Corporation CEO Kenichiro Yoshida.
The Essel Group and Zee, as well as some other entities, have opposed the merger scheme. Imax Corporation, Axis Finance, IDBI Bank, IndusInd Bank, and the Indian Performing Rights Society (IPRS) are among them.
IndusInd Bank and Indian Performing Rights Society have reached a settlement with Zee. The company is in discussion with other creditors to resolve the dispute and close the merger deal. A clearance from the NCLT is required for the merger to complete. Moneycontrol