NCLT asks Sony to respond to plea seeking implementation of Zee-Sony merger

The National Company Law Tribunal (NCLT) Mumbai today granted three weeks to Sony Pictures Networks India to file its reply to an application seeking the implementation of a $10 billion merger between Sony and Zee Entertainment Enterprises..The application has been filed by Mad Men Film Ventures, a shareholder of Zee..The merger between Sony and Zee had been announced on December 22, 2021, but was called off by Sony Pictures (now Culver Max) recently.Zee, however, sought enforcement of the scheme, which the tribunal had approved in August 2023, despite opposition from creditors like Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp and IDBI Trusteeship.Zee shareholder Mad Men Ventures has also now filed an application seeking the implementation of the merger scheme.A coram of judicial member Lakshmi Gurung and a technical member Charanjeet Singh Gulati granted Sony three weeks time to file a reply to Mad Men Venture's application and posted the matter for hearing on March 12..Advocate Shyam Kapadia, appearing for the shareholder, informed the tribunal that the application had been served on Sony on December 5, 2023. However, Sony has not yet filed a response.“It appears from the media reports that there was a dispute between ZEE and Sony on who would lead the resulting company post the merger, even though the scheme of arrangement (merger) clarified who would head the merger as the CEO of the company. They did not want Punit Goenka to be the CEO. So therefore this application was filed," Kapadia said..SeniorAadvocate Darius Khambata, representing Sony, opposed the plea. He informed the tribunal that Sony was seeking a dismissal of the shareholder's application on the ground that it was not maintainable.“It is crystal clear, not only from the application, but also from the affidavit we received yesterday from the shareholder, that he was nothing but a proxy for ZEE. One of the main clauses of the scheme was 5(1). The clause states that the entire scheme was conditional upon the satisfaction of certain conditions precedent in a separate contract between Zee and Sony under the merger cooperation agreement. The scheme is entirely a conditional one and expressly some of the conditions have not been met," the senior counsel argued..Meanwhile, Senior Advocate Janak Dwarkadas, appearing for Zee, pointed out that his client also required time to consider filing a reply.He further apprised the tribunal about Zee's petition for the implementation of the merger scheme, which was yet to be finally numbered..Dwarkadas, who represented Zee, was briefed by a team from Cyril Amarchand Mangaldas (CAM) headed by Managing Partner Cyril Shroff and Partners L Vishwanathan and Indranil Deshmukh..Shardul Amarchand Mangaldas is representing Sony.