The National Company Law Tribunal reversed its verdict on Monday regarding a planned merger between Zee and Sony. The court previously heard multiple objections from several Essel Group creators. They put allegations that the merger is fraudulent and it will benefit the promoters of Zee.
Zee and Sony agreed to a business merger in 2021 and sought permission from NSE, BSE, and other regulators. The decision was put on hold at NCLT as Essel companies raised issues against the non-compete clause added to the scheme.
Amid the new merger, Sony will hold a 50.86% stake in the merged entity, Promotors of Zee will have a 3.99% share and Zee shareholders will hold the rest, 45.15%.
The merger has previously been approved by various organizations such as SEBI and the Competition Commission of India. Entities like Axis Finance Ltd, IDBI Bank Ltd, IMAX Corp, JC Flower Asset Reconstruction Co, and Idbi Trusteeship have raised objections regarding the merger.
NSE and BSE have presented two orders, which are on record, before the court regarding the Essel Group entities. One of them restricts Punit Goenka from occupying q directional position in any listed company.
While countering the argument, Zee’s counsel stated that these provisions in the scheme were never meant to overwrite any statutory disqualifications. If Goenka is disqualified, the shareholders are free to elect someone as Managing Director. He also argued that the scheme shouldn’t fail because of the elimination of Goenka.
