NCLT gives final nod for merger of Sony and Zee
Zee Entertainment Enterprises Ltd. The move paves way for the merger of two of India’s largest media and entertainment companies. With this, the two companies have received all the regulatory approvals needed for the merger.
“From the material on record, the scheme appears to be fair and reasonable and does not seem to violate any provisions of law and is not contrary to public policy," a bench led by Justices Kuldip Kumar Kareer and Anuradha Bhatia held. Similarly, on Thursday, Justice H.V. Subba Rao approved Zee’s application seeking regulatory approval for the merger from NCLT.
Zee’s scheme saw strong opposition from various operational and financial creditors, but the bench refused to entertain any of the objections. “This bench did not find any valid reason to withhold the approval of the scheme at the behest of the above petitioners/objectors who have no direct privity of contract with Zee and withholding such approval would seriously prejudice the interest of 99.997% shareholders of Zee and will shake the confidence of commercial wisdom of the corporate entities. Therefore, this bench is of the considered opinion that there is no merit in any of the above objections raised by the objectors", NCLT said in its 57-page order.
One of the clauses stated that Punit Goenka of Zee should be the managing director and chief executive officer of the merged entity. Following Sebi’s 12 June order, Goenka and Subhash Chandra were restrained from holding key managerial positions in any listed entity. Agreeing with Zee’s counsel Janak Dwarkadas, the bench stated that Sony (Culver Max) had every right to take up this issue at their board level after approval of the scheme, depending on the final outcome of the Sebi order.
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