Report: IDBI trusteeship files an appeal at the NCLAT against Subhash Chandra after the Zee-Sony merger

 Report: IDBI trusteeship files an appeal at the NCLAT against Subhash Chandra after the Zee-Sony merger

Report: IDBI trusteeship files an appeal at the NCLAT against Subhash Chandra after the Zee-Sony merger

According to the NCLT judgment, Subhash Chandra issued a personal guarantee in 2019 in support of the IDBI Trusteeship, ensuring that the debentures will be repaid.

In brief

In the National Company Law Revision Tribunal, IDBI Trusteeship Services Limited (ITSL) is submitting an appeal against Subhash Chandra.

Earlier, NCLT had dismissed the IDBI trusteeship's opposition to the merger.

The merger proposal between Culver Max Entertainment and Zee Entertainment was authorized on August 10 by the Mumbai bench of the NCLT.

Zee Sony Merger: The merger agreement between Sony Pictures Networks India (Sony) and Zee Entertainment Enterprises (ZEEL) is encountering a number of obstacles. In a recent development, IDBI Trusteeship Services Limited (ITSL) has challenged the National Company Law Tribunal (NCLT), Mumbai, ruling approving the merger in an appeal filed at the National Company Law Appellate Tribunal (NCLAT) against Subhash Chandra. was granted permission. The IDBI trusteeship's opposition to the merger had already been dismissed by NCLT.

According to a Moneycontrol article, the case was postponed and sent to a bench led by chairman Ashok Bhushan after it was scheduled for hearing on December 1.

Prior to this, IDBI Trusteeship informed NCLT that it was the trustee for 425 debentures that Essel Infraprojects Limited (EIL) published for certain schemes.

According to the NCLT judgment, Subhash Chandra issued a personal guarantee in 2019 in support of the IDBI Trusteeship, ensuring that the debentures will be repaid.

On the other side, the IDBI trusteeship claimed that Chandra was a defaulter since he had not fulfilled his end of the personal guarantee. According to the accusation, Chandra owes the trusteeship business Rs 500 crore.

Zee Entertainment Enterprises, on the other side, has challenged the IDBI trusteeship claim. "IDBI Trusteeship is undoubtedly not Zee's lender. It is not legally or contractually privy to Zee. It is not entitled to protest the merger."

"Having failed to ensure payment of their alleged dues from other entities of Zee through additional court proceedings, they are considering this fraudulent plan of Zee as a last resort for their recovery," the NCLT said in rejecting the objection. are at odds with one another."

Axis Finance and IDBI Bank have already contested the NCLT ruling. The appeal filed by Axis Finance and IDBI Bank against the National Company Law Tribunal (NCLT) judgment legalizing the Zee-Sony merger was forwarded to the chairperson's bench by the NCLAT bench on October 31.

Zee Entertainment Enterprises as well as Culver Max Entertainment (Sony Pictures Networks India) announced a massive merger in December 2021 that would result in the creation of 75 channels, two video streaming services (Zee5 and SonyLIV), and two movie studios (Zee Studios and Sony Pictures Films India). within the same division.

The merger proposal between Zee Entertainment Enterprises Limited (ZEEL) as well as Culver Max Entertainment (Sony) was authorized by the Mumbai bench of the NCLT on August 10.

The firm said at the time that it could proceed with this acquisition because it had an agreement with IDBI Bank, IndusInd Bank, and Indian Performing Rights Society (IPRS).

conflict over leadership

It was reported earlier this week that the corporations were having trouble finalizing the leadership structure for the combined company. According to a Financial Express article, the businesses are pressuring to choose their respective CEOs—Punit Goenka, MD of ZEEL, and NP Singh, MD of Sony India—to manage the combined media entity.

In a regulatory filing later on Thursday, the business said that the claims are "factually incorrect."

In a regulatory filing the previous day, Zee said, "We wish to reiterate all the company is working towards successfully finishing the proposed merger in accordance with the overall scheme of arrangement approved by the NCLT, Mumbai Bench."

Zee also states that it spent Rs 176.2 crore on the Sony merger. According to the company's regulatory filings, in FY2013, merger-related expenditures amounted to about Rs 7.3 crore.