Zee Entertainment Enterprises on September 10 announced that IDBI Bank has filed an application before the Mumbai bench of NCLT to initiate insolvency process against the company over a default of more than Rs 225 crore. Zee has denied the claims, and said it may take legal actions against the bank for 'malicious prosecution, defamation and damages'.
In an exchange filing, Zee Entertainment Enterprises said that the application to begin Corporate Insolvency Resolution Process against the company has been filed before the Mumbai bench of National Company Law Tribunal (NCLT). The claim is associated with the credit facilities availed by Siti Networks from the bank.
"Clearly, the present application is with mala fide intent to harass and cause disrepute to the Company. The Application is malicious, fraudulent and meritless and an abuse of the process of law," Zee Entertainment said.
The flagship company of the Zee Group said it vehemently disputes the lender's claims and is taking all necessary actions to contest them. "The Company may also adopt legal remedies against the Bank including for malicious prosecution, defamation and damages, as may be advised to it," it added.
Earlier in 2023, NCLT had dismissed IDBI Bank's insolvency plea against the company. The Delhi bench of the National Company Law Appellate Tribunal (NCLAT) in April this year dismissed insolvency appeal filed by IDBI Bank against the company, upholding NCLT's ruling.
Speaking about the possible financial impact on the company, Zee Entertainment said, “Given however that the Bank has already lost in the earlier rounds before the NCLT and then before the Hon’ble National Company Law Appellate Tribunal, New Delhi, the Company does not expect any financial implication.”
Zee Entertainment shares were down more than 1 percent to trade at Rs 113.90 apiece, while IDBI Bank shares were up over 2 percent to trade at Rs 94.55 apiece.
Notably, this comes amid buzz over IDBI Bank's disinvestment process. Finance Minister Nirmala Sitharaman on September 5 said that the strategic divestment process of IDBI Bank is moving fast and is expected to conclude by the ongoing financial year 2026.
During an interview with Network 18 Group Editor-In-Chief Rahul Joshi, the finance minister hinted that more such stake sales can happen in the future. "I am not negating anything. More disinvestments," she said.
Dubai's government-owned Emirates NBD, Prem Watsa's Fairfax India Holdings, Kotak Mahindra Bank and Oaktree Capital Management - who were cleared by the Reserve Bank of India as ‘fit and proper’ to bid for IDBI Bank, are expected to participate in the financial bidding process, people close to the development told Moneycontrol on condition of anonymity.
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