As NCLAT stays insolvency proceeding against ZEE, NSE to issue fresh F&O contracts

Last week, the exchange had said no fresh month futures and options (F&O) contracts would be issued on the expiration of contracts for February.

National Stock Exchange (NSE) has said that it was reverting its earlier surveillance action on Zee Entertainment Limited (ZEEL) after the National Company Law Appellate Tribunal (NCLAT) stayed the order directing the initiation of insolvency proceedings against the media and entertainment firm.

Last week, the exchange had said no fresh month futures and options (F&O) contracts would be issued on the expiration of contracts for February. It added that the margin requirement would also be 100 percent for all derivative contracts.

Thus, after the reversion of the order, the exchange will now issue fresh contracts, i.e., for May month from February 28 onwards. Contracts for March and April expiry are already valid.

NCLT Mumbai on February 22 admitted insolvency proceedings against ZEEL in a plea filed by IndusInd Bank. Zee was the guarantor for IndusInd Bank's Rs 150-crore loan to Essel Group's Siti Networks, however, it failed to honour the Debt Service Reserve Account Guarantee Agreement (DSRA). The shortfall amounted to Rs 83 crore.

NCLAT, after staying the order issued notice to IndusInd Bank on the plea by Zee managing director Punit Goenka, said it will hear the case again on March 29. Zee also said in the NCLAT that in the NCLT hearing, it was not allowed a hearing to defend its position; hence, it appealed to set aside the order on initiation of insolvency.