The National Company Law Appellate Tribunal (NCLAT) has refused to stay the proposed merger between Zee Entertainment Enterprises Ltd (ZEEL) and Sony. Axis Finance and IDBI bank had challenged the merger in the NCLAT on the grounds that ZEEL had stood guarantee for loans they had given to an Essel group entity, and that they would not be able to recover the loan from ZEEL if the merger progresses.
NCLAT refused to stay the merger and has posted the next hearing in January. However, the merger itself is in question, with Sony and Zee differing on the appointment of Punit Goenka as the CEO of the combined entity. The NCLAT said that while the merger is subject to the orders of the court, they cannot stay the same without hearing the case on merits. The Mumbai bench of the NCLT has gives its approval for the merger.
NCLT had then dismissed the claims made by financial institutions opposing the move, including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp. According to ZEEL the lenders neither possessed 5 per cent of the company’s debt nor 10 per cent of its shareholding, rendering them non-stakeholders in the merger.