NEW DELHI: Zee group on Tuesday withdrew its petition against the Japanese major Sony Corp for calling off the $10-billion worth merger proposal from the Mumbai bench of the National Company Law Tribunal to “better serve shareholders interest”.
In a statement, Zee said its board has decided to withdraw the petition against Sony following legal advice and reviewing the action-oriented steps implemented by the management. “The board has advised the management to withdraw the petition in the interest of shareholders,” the statement said, but added that they will be aggressively pursuing their claims in the Singapore International Arbitration Centre from Sony, which includes a $90 million in damages from Sony.
It further said going forward the focus will be driving growth and pursuing other strategic opportunities to generate higher value for all shareholders. “We will aggressively pursue all its claims against Sony in the ongoing arbitration proceedings at the Singapore International Arbitration Centre and in other fora,” it said.
Puneet Goenka-led Zee Entertainment had moved the NCLT on January 24, 2024, seeking directions to implement the $10-billion merger scheme between Zee, Culver Max Entertainment, the domestic arm of Sony and Bangla Entertainment. Had the deal sailed through, it would have created the largest media company in India with over 75 channels and a slew of other media verticals like OTT platforms.
Sony hinted at calling off the plan, announced in December 2021, last December, citing a slew of breaches from the merger agreement including not meeting financial metrics and Goenka’s not agreeing to step aside from management positions. Another trigger was the Sebi ban on both father-son duo from the markets for two year citing fund diversions and other breaches from the listing agreement in the middle of last year.
“The decision to withdraw the implementation application is based on the advice received by the board after a detailed consultation with legal experts. This decision will also enable us to pursue growth and evaluate strategic opportunities to generate higher value for all shareholders.
The board remains committed to reviewing the strategic action-oriented steps taken by the management and providing timely guidance. This decision will also enable us to continue to aggressively pursue all its claims against Sony in the ongoing arbitration” the statement said.
Unfolding of events
Dec 2021: Zee and Sony Corp of Japan announce a $10 bn merger
Aug 2023: Sebi bars Zee promoters Subhash Chandra and son Puneet Goenka from any management role in company and also from market for two years citing fund diversions and other malpractices.
Dec 2023 Sony says deal unlikely to sail through
Jan 24, 2024: Sony formally calls off the merger agreement.
Jan 31, 2024: Zee moves NCLT Mumbai seeking direction to Sony implement the merger scheme.
Feb 2024: Zee moves Singapore Arbitration Centre seeking $90 million in damages from Sony
April 16, 2024: Zee voluntarily withdraws the merger petition from NCLT