Zee Tightens Belt To Fight Sony In Singapore; Also Knocks On NCLT Door

Zee Entertainment Enterprises Ltd. initiated legal proceedings to contest against Sony Group's claims in Singapore and also approached India’s National Company Law Tribunal (NCLT) to implement the scrapped $10 billion merger deal with the Japanese conglomerate’s Indian units.

Zee’s move comes after Sony Group’s units Culver Max Entertainment Private Ltd. (formerly known as Sony Pictures Networks India Private Ltd.) and Bangla Entertainment Private Ltd. (BEPL) terminated the proposed merger with the Indian media and entertainment company.

Culver Max and BEPL also invoked arbitration and sought a termination fee of $90 million from Zee alleging the company breached the terms of the agreement signed in December 2021.

The company initiated appropriate legal action to contest Culver Max and BEPL’s claims in the arbitration proceedings before the Singapore International Arbitration Centre (SIAC), Zee said in a stock exchange announcement today.

The Mumbai-based company has also moved to the Mumbai bench of NCLT, seeking directions to implement the merger scheme, it added.

Zee’s Rebuttal

In its reply to Culver Max and BEPL, Zee denied any breach of its obligations under the merger agreement and reiterated that the company complied with all its obligations in good faith.

Zee, which also denied that Culver Max and BEPL are entitled to terminate the merger agreement, said the claim for termination fee is legally untenable and has no basis whatsoever.

The company asserted that Culver Max and BEPL are in default of their obligations to give effect to and implement the merger scheme, cleared by the NCLT.

Zee said it has asked 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. The company has reserved all its rights in this regard, it added.

Zee and Sony Group in December 2021 signed definitive agreements to merge their businesses. The proposal earlier received approvals from the NSE, BSE and Zee shareholders. The Competition Commission of India also approved the merger with modifications.

However, the merger faced hurdles, including opposition by Zee’s creditor Axis Finance.

Sign From Lord

Zee Managing Director and Chief Executive Officer Punit Goenka earlier this week said the collapse of the proposed merger deal with Sony Group is a sign from the Lord and he will focus on strengthening the company for all its stakeholders.

“I resolve to move ahead positively and work towards strengthening Bharat’s pioneering M&E (media and entertainment) company, for all its stakeholders,” he said on social media platform X, formerly Twitter.

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