Two days after the biggest media merger of India fell through, Zee Entertainment Enterprises Ltd (ZEEL) has approached the National Company Law Tribunal (NCLT) against Sony Group for calling off the merger.
ZEEL on Wednesday filed a petition before the NCLT against Sony for terminating the deal. This comes two days after it issued a termination letter for the merger, demanding a break-off fee of $90 million from Zee for allegedly violating the merger conditions.
Through its petition, ZEEL has sought direction from the NCLT to urge Sony to adhere to the merger conditions. Further, it has sought legal action against Sony for claiming the break-off fee of $90 million ( ₹748.5 crore), according to a regulatory update by ZEEL.
Zee in its petition asserted that Sony Group firm Culver Max and BEPL (Bangla Entertainment Pvt Ltd) “are in default of their obligations” by backing out of the merger. Zee further sought that the scheme of the merger, previously sanctioned by NCLT, be implemented.
NCLT had previously given its nod to the scheme of merger of ZEEL with Sony group entities Culver Max Entertainment (earlier known as Sony Pictures Networks India) and BEPL, nearly six months before the deal was called off.
The tribunal noted, “The Company has called upon Culver Max and BEPL to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the Merger Scheme, sanctioned by the NCLT.”
Why did the Sony-ZEEL merger fall through?
Sony sent a termination letter to Zee Entertainment on Monday, saying that it is pulling out of the massive $10 billion deal after breach of merger deal conditions by ZEEL. The media company, however, dismissed these claims.
Sony said in its termination letter that ZEEL did not satisfy the merger conditions despite engaging in discussions to extend the end date for consummation of the transaction. Notably, the termination letter was issued two years after the merger was announced.
The Chandra family-promoted media entity replied to Sony’s letter and said, “The company categorically refutes all claims and assertions made by Culver Max and BEPL regarding alleged breaches of the MCA by the Company, including their claims for the termination fee, and reserves all its rights in this matter.”
(With inputs from PTI)