 "Sony, Zee")
The legal dispute between Zee Entertainment Enterprises and Sony Pictures Networks India has commenced in Mumbai and Singapore. Sony and Zee are scheduled to present their arguments before the Singapore International Arbitration Centre (SIAC) starting Wednesday, while back home, the National Company Law Tribunal (NCLT) has given both parties three weeks to submit their replies to a petition filed by a Zee shareholder.
The legal battle unfolded when Sony terminated its merger agreement on January 22, following the signing of the agreement in December 2021. The proposed merger aimed to create a $10 billion entertainment conglomerate in India, holding a quarter of the market share among general entertainment channels.
Sony Pictures, the Japanese firm, has enlisted the services of senior lawyer Harish Salve to present its case at the SIAC, while Zee has engaged former Attorney General of India Mukul Rohatgi to represent its side.
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Zee has refrained from commenting on the matter.
Representing the Zee shareholder at the NCLT, Shyam Kapadia stated that the application was served on Sony on December 5, 2023, yet Sony has not filed any response.
On the other hand, senior advocate Darius Khambata, representing Sony, opposed the application, stating they have sought the dismissal of the shareholder’s application as it was not maintainable.
Khambata emphasised that the application and the affidavit filed by the shareholder indicated proxy representation for Zee. He highlighted that one of the clauses of the merger agreement stipulated that the entire scheme was conditional upon the satisfaction of certain conditions precedent in a separate contract between Zee and Sony.
Khambata argued that the entire merger scheme was conditional, and some conditions have not been met. Senior advocate Janak Dwarkadas, appearing for Zee, requested additional time to file the company’s reply.
A Reuters report on Monday mentioned that Sony’s notice to Zee alleged the Indian company had not made commercially reasonable efforts to meet specific financial thresholds, including those related to cash availability.
According to Sony, Zee’s cash position as of September 30, Rs 476 crore, fell “much below the requirements” of the merger agreement.
Sony also expressed reservations about Punit Goenka becoming the managing director and chief executive officer of the merged entity after the Securities and Exchange Board of India (Sebi) took action against Goenka for alleged fund diversion. Securities Appellate Tribunal had set aside the Sebi order in October last year.
