The National Company Law Tribunal (NCLT) in Mumbai has rendered its verdict, affirming the merger scheme between Zee Entertainment Enterprises (ZEE) and Culver Max Entertainment (formerly known as Sony Pictures Networks India). The judicial member Justice HV Subba Rao and technical member Madhu Sinha pronounced the decision after the tribunal had reserved its judgment on July 11, addressing concerns raised by creditors regarding the proposed scheme.
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The merger, envisioned in a non-binding term sheet agreement inked in September 2021, aims to integrate digital assets, linear networks, production operations, and program libraries of Culver Max and ZEE. Per the arrangement, the Sony Group is set to indirectly possess 50.86% of the combined entity, while ZEE’s founder would retain around 4%, with the remaining shares distributed among ZEE’s shareholders.
As part of the merger, Sony Group has agreed to provide a ‘non-compete’ fee of ₹1,100 crore to Essel Group promoters. The merger had secured approvals from regulatory bodies such as the Competition Commission of India (CCI), the Securities and Exchange Board of India (SEBI), and the National Stock Exchange (NSE), among others. However, opposition arose from creditors including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship, particularly in relation to the inclusion of the non-compete clause.
In the backdrop of the merger, objections were raised by the NSE and BSE, citing an order by the Securities Appellate Tribunal (SAT) against certain heads of the Zee Entertainment group. SAT had upheld SEBI’s interim order that prohibited Essel Group Chairman Subhash Chandra and ZEE’s CEO Punit Goenka from holding directorial or key managerial positions in listed companies.
