NCLAT to hear challenges to Zee-Sony merger on May 17

Zee-Sony merger: NCLAT to hear the case from May 17

The National Company Law Appellate Tribunal (NCLAT) on April 15 decided to hear a challenge to Zee-Sony merger from May 17, junking creditors IDBI Bank and Axis Finance’s contention to wait for the NCLT outcome before hearing the case.

IDBI Bank and Axis Finance had urged the appellate tribunal to wait for the outcome of Zee's plea in the National Company Law Tribunal (NCLT) to enforce the merger, which has been called off.

On January 22, Sony called off the merger, which would have created a $10-billion media giant in the country. The move was in part because Zee failed to meet some financial terms of the deal and come up with a plan to address them. Zee denied the allegations and accused the Japanese company of "bad faith" in calling off the merger.

A plea asking Sony to enforce the merger is pending with the Mumbai bench of NCLT and is expected to be heard from April 25.

Additional Solicitor General (ASG) N Venkatraman, who appeared for IDBI Bank, said the outcome of Zee's NCLT plea would have a bearing on the case, as it would decide the future of the merger.

Appearing for Zee, senior advocate Arun Kathpalia said the NCLAT case was an appeal against the sanction to Zee-Sony merger, while the one in NCLT dealt with the implementation of the merger.

On December 15, NCLAT refused to grant a stay on the Zee-Sony merger. The NCLAT said while the merger is subject to orders of the court, they cannot stay the same without hearing the case on merits. However, not much has moved as the merger has been terminated.