Axis Finance approaches NCLAT against NCLT approval of Zee-Sony merger

Zee-Sony merger: This comes just over a month after the NCLT's Mumbai bench approved the merger on August 10 by dismissing all applications against it

Axis Finance has filed an appeal in the National Company Law Appellate Tribunal (NCLAT) against the National Company Law Tribunal's (NCLT) nod to the Zee-Sony merger, the company said on Thursday. This comes just over a month after the NCLT's Mumbai bench approved the merger on August 10 by dismissing all applications against it.

"The company has been served with an appeal on behalf of Axis Finance Limited against the company before the NCLAT, Delhi, challenging the order dated August 10, 2023 passed by NCLT, Mumbai Bench, dismissing the Interlocutory Application No. 124 of 2022 in CP (CAA) No. 209 of 2022 in CA (CAA) No. 204 of 2022 and approving the composite scheme of arrangement amongst Zee Entertainment Enterprises Limited, Bangla Entertainment Private Limited and Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India Private Limited)," it said in a release.

The $10 billion merger was originally announced in 2021. The plan hit problems after the Securities and Exchange Board of India (Sebi) banned Zee's chief executive officer (CEO) Punit Goenka, who had been lined up to run the merged entity, from the board of listed companies for a year.

Zee later formed an interim committee under the supervision of its board to run operations after Punit Goenka failed to get the ban overturned on appeal.

Goenka told The Economic Times in June that the merger would go ahead whether or not he was CEO of the new entity.

In February, an Indian tribunal put on hold insolvency proceedings initiated by lender IndusInd Bank Ltd against Zee, in a major relief for the media company. Later, the company settled its dispute with the lender.

Last year, Zee and Sony offered concessions such as pricing discounts to help ease regulatory concerns. They received antitrust approval for the merged entity, which will compete with Walt Disney India and billionaire Mukesh Ambani-owned Network18.

Another lender, IDBI Bank, is also contesting a different matter against ZEEL before the NCLAT. The NCLAT has issued notice to the Subhash Chandra-family-led entertainment firm.

IDBI Bank has challenged the NCLT order, which on May 19, rejected a plea to initiate insolvency proceedings against the media major.

(With agency inputs)