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Almost a week before Sony terminated the merger with Zee, Essel Group Chairman and Zee founder and promoter, Subash Chandra, wrote a letter to the Finance Minister Nirmala Sitharaman, asking for intervention to safeguard the interests of Zee minority shareholders.
In the letter dated January 16, Chandra characterised the investigation by the Securities and Exchange Board of India (SEBI) as “predetermined,” citing evidence from the order passed by the appellant court, Justice Tarun Agarwalla, Presiding Officer of the Securities Appellate Tribunal.
Chandra further added that the information asked by SEBI in its investigations is also a matter of company records. “My concern is the timing of this new notice and the urgency of the same since it matches with the merger completion timeline of Zee and Culver Max (Sony India). The mentioned notice does not contain any point that is not in the company records that has been provided to SEBI.”
SEBI’s investigation into Chandra and his son and Zee MD Punit Goenka regarding their misappropriation of company (Zee) funds was a major factor in scuttling the Zee-Sony deal.
Sony announced on January 23rd that it had sent a termination notice to Zee.
The dissolution of the merger has caused a precipitous drop in Zee’s valuation. Moreover, institutional investors could be mounting an extraordinary general meeting to oust Goenka.
- Also read: Zee drags Sony to NCLT to complete merger
They have already written to SEBI to take action against the promoters.
What will ensue in the aftermath of the dissolution of the Zee-Sony merger will be a messy legal affair. On Wednesday, Zee Entertainment said it had moved the National Company Law Tribunal (NCLT) and Singapore International Arbitration Centre (SIAC) against Sony Pictures Network India’s termination of the merger deal.
The company has approached the Mumbai bench of NCLT, “seeking directions to implement the merger scheme.”
This comes even as Sony’s India chief told employees that the company will look for other inorganic growth opportunities.
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