Sony wants its own executive as head of merged company instead of Zee's Punit Goenka
Zee Entertainment Enterprises Ltd (ZEEL) chief Punit Goenka's position as MD and CEO of the proposed Sony-Zee merged entity is on shaky ground as he continues to be under investigation by the Securities and Exchange Board of India (Sebi) for the alleged diversion of funds from ZEEL to promoter entities, people aware of the development told ET.
Sony Group Corp, especially sensitive to this shadow over the deal given the stringent corporate governance norms in Japan and the US, is said to be pushing for its longstanding India executive, NP Singh, to become the CEO of the merged entity. Goenka is still the subject of a Sebi investigation, despite the recent relief granted by the Securities Appellate Tribunal (SAT).
While Goenka has received interim relief from the SAT, the order states that he will have to cooperate with Sebi in the probe.
SAT has also said in its order that if any evidence is discovered against Goenka, Sebi may follow the legal process and take relevant action.
The development has significant implications for the merger agreement between ZEEL and Culver Max Entertainment, the Indian media division of Sony Group Corp, since Goenka's nomination as MD and CEO of the merged entity was a necessary condition for the merger.
Tony Vinciquerra, chairman of Sony Pictures Entertainment, Ravi Ahuja, chairman of Sony Pictures' Global Television Studios and Corporate Development, and Goenka have held talks to find a way out.
However, the two sides have not made any progress on this thorny issue.
According to a person familiar with the situation, Goenka has made it clear to Sony's brass that he wants to be the MD and CEO of Sony-Zee, particularly after the SAT verdict overturned Sebi's regulatory ban. This had
