The green light from the National Company Law Tribunal (NCLT) for the merger between Zee Entertainment Enterprises (ZEEL) and Sony Pictures Network India, now known as Culver Max Entertainment, has elicited positive sentiments from industry analysts. This significant development aligns with the ongoing efforts to merge the television networks, digital assets, production operations, and program libraries of the two entities.
Despite the favorable NCLT decision, the question of leadership for the combined entity remains uncertain, particularly in light of the Securities and Exchange Board of India’s (SEBI) interim order. This order, released on June 12, raised concerns about ZEEL’s founder Subhash Chandra and his son, Punit Goenka, allegedly misusing their roles to divert funds for personal gain, leading to their disqualification from directorships in listed companies.
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Emkay Global, in its report, emphasized that while Punit Goenka’s case with SEBI is ongoing, the merger’s momentum is unlikely to be derailed by these proceedings.
The merger envisions Sony’s shareholders holding 50.86% of the combined entity, while Zee’s promoters retain 3.99%, and ZEEL’s shareholders hold the remaining 45.15%. Necessary approvals include a filing with the Registrar of Companies, anticipated within 30 days of the NCLT order receipt, and scrutiny by the Ministry of Information and Broadcasting. Following these steps, delisting for approximately six weeks is expected.
