Zee Entertainment's operational creditor files Rs 211 crore insolvency case against company

The petition has been filed for the "initiation of corporate insolvency resolution process against the company, claiming a debt and default of Rs. 211 crore towards royalty payable for utilization of “literary and musical works", the exchange filing noted.

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An operational creditor has filed an insolvency case against Zee Entertainment Enterprises Ltd for allegedly defaulting on an amount of over Rs 211 crore, as a per a regulatory filing submitted by the company on January 2.

The operational creditor, Indian Performing Right Society Ltd (IPRS), has approached the Mumbai-bench of the National Company Law Tribunal (NCLT) and registered its case under Section 9 of the Insolvency and Bankruptcy Code, 2016.

The petition has been filed for the "initiation of corporate insolvency resolution process against the company, claiming a debt and default of Rs. 211,41,82,521/-, towards royalty payable for utilization of “literary and musical works," the exchange filing noted.

Zee said it will be filing a reply "rejecting the claim" on the ground that there is a "pre-existing dispute" between the parties on the claimed amount.

The claim sought by the operational creditor is not in consonance with the interpretation of the law on the point of payment of royalties for
“literary and musical works” by the Delhi High Court, and "hence, the claimed amount is not due or payable to IPRS".

IPRS' plea comes around two weeks after IDBI Bank moved the NCLT with an insolvency plea against Zee to recover an amount of Rs 149.60 crore.

Zee, in an exchange filing on December 15, said it is "vehemently disputing the bank's claim in other proceedings filed by the bank against the company for recovery of its alleged dues".

In the quarter ending September 2022, Zee had reported a net profit of Rs 176.56 crore, which was 45.8 percent lower as against Rs 326.28 crore clocked in the year-ago period. The company's net income from operations went up 3.81 percent year-on-year to Rs 1,893.24 crore.

On the first trading day of 2023, Zee's shares closed at Rs 243.15 apiece on the BSE, which was 1.35 percent higher as against the previous session's close.