The National Company Law Appellate Tribunal on Monday disposed of the National Company Law Tribunal (NCLT) order admitting IndusInd Bank’s insolvency plea against Zee Entertainment after both parties announced that all dues have been settled.
The appellate tribunal also told both parties to pay their dues to the Interim Resolution Professional.
Both parties had told the NCLAT in March that they had reached a settlement in relation to their payment dispute before June 30 or a week after the Zee-Sony merger.
The NCLAT on May 26 had set aside an order by NCLT which had directed the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to review their no-objection certificate (NoC) given for the Zee-Sony merger.
The appellate tribunal gave the order on an appeal filed by Zee Entertainment Enterprises Ltd (ZEEL) against the verdict by the Mumbai Bench of the NCLT on May 11.
The appellate tribunal set aside the NCLT Mumbai order on grounds of “violation of principles of natural justice”. It said Zee should have been heard, and sent the case back to the NCLT.
Meanwhile, IndusInd Bank had sought to start insolvency proceedings against Zee in February, threatening the Zee-Sony merger. IndusInd Bank claimed a default of Rs 83.08 crore against Subhash Chandra-promoted ZEEL.
Sony and Zee signed a merger deal back in December 2021 but the deal was delayed due to legal roadblocks.
The Securities and Exchange Board of India (Sebi) had restrained both, Subhash Chandra and Punit Goenka, Managing Director and CEO of ZEEL from holding directorial or key management personnel positions in any listed entity for alleged diversion of funds of Essel Group companies for their own benefit. This was challenged by both Chandra and Goenka. The Securities Appellate Tribunal (SAT) had on June 27 reserved its order on the appeal.
Goenka had moved the appellate tribunal in February to challenge the NCLT Mumbai order to admit insolvency proceedings against the company.
The proposed deal would see Sony Pictures Entertainment indirectly hold a 50.86 per cent stake in the combined company, while Zee’s founders will have a 3.99 per cent share. The remaining 45.15 per cent will belong to other shareholders, including the public.
The proposal has been approved by the BSE, NSE, and shareholders of Zee. It has also been approved with modification by the Competition Commission of India.
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