Updated January 24th, 2024 at 21:24 IST
ZEEL appeals to Singaporean arbitration, NCLT after Sony’s dealbreak
The company approached the arbitration centre, tribunals claiming Sony is not entitled to terminate the deal.
Zee Entertainment Enterprises Limited has issued a reply to Sony, refusing to accept any breach of obligations under its deal for the $10 billion merger.
ZEEL on Wednesday said it has called on Sony Group to withdraw the Japanese company's termination between the two enterprises, which was called off after repeated delays.
The Subhash Chandra-backed conglomerate has also initiated legal action to contest Sony's claims of breach of terms in arbitration proceedings before the Singapore International Arbitration Centre.
Reiterating that the company has complied with all its obligations in good faith, the company denied that Sony is entitled to terminate the deal.
Culver Max’ claim to termination fee is also legally untenable and has no basis, Zee said, and has also approached the National Company Law Tribunal (NCLT) seeking directions to implement the merger scheme.
Paralelly, ZEEL has called Upon Culver Max and BEPL to immediately withdraw the termination.
Sony had claimed $90 million (Rs 748.5 crore) after it called off the merger on Monday, after
ZEEL further said it is evaluating all available options, and basis the guidance received from the Board, and will take all necessary steps to safeguard the long-term interests.
This also includes “taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings”.
Sony and Zee did not elaborate on which merger conditions had been unfulfilled. However, the firms had been at odds over Zee's proposal for its CEO Punit Goenka to lead the combined company, after Goenka became the subject of an investigation by India's market regulator.
Goenka, who was in Ayodhya city on Monday to attend the consecration of the Ram Temple, on Monday said the collapse of the Sony deal as "a sign from the Lord," in a post on X. He added that he would move forward by strengthening his company for stakeholders.
Zee said on Wednesday it has approached India's National Company Law Tribunal (NCLT), which handles corporate disputes, seeking directions to implement the merger.
"This action does not come as a surprise, but there are no substantive reasons for the NCLT to rule in favour of Zee and force a merger," Shriram Subramanian, founder and MD of corporate governance advisory firm InGovern Research Services, said.
Zee's shares tumbled nearly 34 per cent on Tuesday on worries the company would fail to thrive amid increasing competition. The stock recouped some losses on Wednesday, closing 6.8% higher ahead of its filing to exchanges.
(With agency inputs)
Published January 24th, 2024 at 21:24 IST