The National Company Law Appellate Tribunal (NCLAT) on Thursday issued notice to Zee Entertainment Enterprises Ltd (ZEEL) in a plea by IDBI Bank to initiate insolvency proceedings against the company.
IDBI Bank, in its plea, said it was unable to recover unpaid dues of around ₹150 crore from Zee. The tribunal instructed both parties to submit replies and rejoinders, setting the next hearing for the matter on October 11.
Many banks, including IndusInd, Standard Chartered, Axis Bank and IDBI, have initiated insolvency proceedings against Zee ahead of its merger with Sony. So far, Zee has reached a settlement with IndusInd and Standard Chartered.
IDBI Bank contested the decision of the National Company Law Tribunal (NCLT) Mumbai Bench, on May 19, after NCLT had denied IDBI’s request to commence insolvency proceedings against Zee.
According to the NCLT Mumbai Bench order, Zee, the corporate guarantor for a loan taken by Siti Networks (the principal borrower of IDBI Bank), had defaulted within the specified period under Section 10A.
However, IDBI Bank contended that the default occurred before the Section 10A period, thus contesting the NCLT order.
This is one of the many cases against Essel Group. Earlier this month, Punit Goenka, the former MD & CEO of Zee Entertainment Enterprises Ltd, moved the Securities Appellate Tribunal (SAT) to challenge a recent confirmatory order issued by the Securities and Exchange Board of India (SEBI).
In the hearing on Wednesday, SAT expressed dissatisfaction with SEBI’s order that prohibited Punit Goenka from holding key managerial positions within Zee group companies.