NCLAT defers hearing of challenges against Zee-Sony merger to March 18

NCLAT defers hearing of challenges to Zee-Sony merger

The National Company Law Appellate Tribunal (NCLAT) on February 23 deferred the hearing of pleas challenging sanction to the Zee-Sony merger to March 18.

IDBI Bank, IDBI Trusteeship and Axis Trusteeship challenged the National Company Law Tribunal (NCLT) order from August granting a legal sanction to the merger.

Between the last hearing of the case in early January to now, Sony called off the merger. 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, news agency Reuters reported. It reviewed the termination notice.

Zee denied the allegations and accused the Japanese company of "bad faith" in calling off the merger.

As reported by Moneycontrol, a section of Zee's public shareholders have written to the company, seeking details of the chain of events that led to the termination of the merger agreement.

A litigation asking Sony to enforce the merger is currently pending at the NCLT in Mumbai. 

NCLAT litigation so far:

On December 15, the NCLAT refused to grant a stay on the merger of media giants Zee Enterteinment Enterprises Limited (ZEEL) and Sony.  The NCLAT noted that while the merger is subject to the orders of the court, they cannot stay the same without hearing the case on merits.

On the last date of hearing on October 31, the NCLAT transferred the cases to a bench led by chairperson Justice (retd) Ashok Bhushan.

On October 12, ZEEL's lawyers Mukul Rohatgi and Arun Kathpalia urged the tribunal not to pass any orders in the case, saying Axis Finance didn't have the locus to file such a plea. They also objected to the adjournment as IDBI's case arose out of a different set of facts.

The NCLT had on August 10 approved the merger of Zee Entertainment and Sony Pictures Networks India, paving the way for the creation of a $10-billion media giant in the country.

An NCLT bench of HV Subba Rao and Madhu Sinha had initially reserved the judgment after creditors such as Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship raised concerns about the scheme.