In the face of the merger of media titans Zee Entertainment Enterprises Limited (ZEEL) and Sony, the National Company Law Appellate Tribunal (NCLAT) has turned down the request for a stay, letting the wheels of the consolidation roll. The tribunal, however, has issued a notice in response to the plea and has slated the case for a hearing on January 8, as per a report by moneycontrol.
The merger faced opposition from Axis Finance and IDBI Bank, who lodged a challenge in the NCLAT.
ASG (Additional Solicitor General) N Venkatraman, representing IDBI Bank, argued that Zee Entertainment Enterprises Limited (ZEEL) had guaranteed loans to an Essel entity. Expressing concern, amidst the hearing, he highlighted the potential difficulty in recovering the loan from ZEEL if the merger proceeds, thus urging the NCLAT to intervene and put a pause on the merger's progress.
Senior advocates Mukul Rohatgi, Abhishek Manu Singhvi, and Arun Kathpalia, representing ZEEL, vehemently objected to the possibility of a stay. They argued that IDBI and Axis Finance lack the legal standing, as per the law, to file such a plea. Rohatgi informed the court that these companies do not meet the requisite criteria in terms of lending capacity or share capital, making their challenge to the Zee-Sony merger legally questionable.
The NCLAT observed that although the court's orders govern the merger, they cannot impose a stay without a thorough consideration of the case on its merits. As per the report, the appellate tribunal instructed the submission of responses and postponed the hearing to January 8.
Earlier on August 10, the NCLT granted approval for the merger between Zee Entertainment and Sony Pictures Networks India, marking the pathway for the establishment of a media giant valued at $10 billion in the country.
