The ongoing legal wrangle between SEBI and Punit Goenka has delayed the merger between Zee and Sony. The Japanese company had earlier expected the merger to be completed by the end of September. On Friday, Sony said the deal could take a few more months. 

SEBI had passed a confirmatory order against Punit Goenka in August, which bars his from any key positions at Zee for at least eight months starting August. This followed SEBI’s investigation in June against Goenka and his father Subhash Chandra, which found that the father-son duo were misappropriating funds from the company. The market regulator alleged that the duo helped move funds out of ZEEL and routed them back to the company through layered and circuitous transactions. They did so by “falsely portraying that ZEEL had received the dues from associate entities”, it said.

Goenka was the former Chief Executive Officer of Zee, before he resigned following SEBI’s allegations. SEBI says it needs these eight months to gather evidence against Goenka and Chandra. SEBI argued that Goenka and Chandra’s  presence at Zee would exert undue influence and impede the investigation. 

These developments coincide with the National Company Law Tribunal (NCLT) approving the merger of ZEEL with Culver Max Entertainment, earlier Sony Pictures Networks India.

One of the key terms of the merger agreement was that Goenka would lead the merged entity. At this point, Goenka has publicly stated that the merger will go on, with or without him leading the charge.

Goenka is fighting the SEBI order in the Securities Appellate Tribunal (SAT), which is expected to announce its verdict soon