In a relief to Zee Entertainment Enterprises Ltd (ZEE), the National Company Law Tribunal (NCLT) on January 30, has approved the company’s plea seeking implementation of the now junked merger with Sony's India entity Culver Max Pvt Ltd. NCLT has issued notice to Sony Group entities seeking a response within three weeks, in relation to the plea filed by Zee shareholders, Mad Men Film Ventures, for the implementation of the merger.

NCLT has set the next date of hearing for March 12. The development comes almost a week after the Japanese entertainment behemoth Sony Group Entities put an end to two-year-long merger negotiations with Zee citing the inability of the latter to fulfill the merger agreement. Sony has also approached the Singapore International Arbitration Centre (SIAC) for an emergency arbitration while seeking a termination fee worth $90,000,000 from Zee on account of "alleged breaches" of the agreement. The first hearing of the emergency arbitration will reportedly take place on January 31.

Notably, ZEE, while taking a legal course of action against Sony, has issued a reply to Culver Max and BEPL (Bangla Entertainment Private Limited), specifically denying any breach of its obligations under the merger co-operation agreement (MCA) and reiterating it has complied with all its obligations in "good faith.” Meanwhile, Zee’s promoter Subhash Chandra is also reportedly considering criminal action against the Japanese entertainment behemoth following the fallout of the merger. The promoter family is also reportedly considering increasing their stake to 26% from the earlier 4% in the domestic entertainment behemoth.

The $10-billion deal, which was announced in December 2021, would have created the country’s largest entertainment network with more than 70 entertainment channels giving an edge to its rivals such as Hotstar, Amazon Prime and Jio Cinema. However, ZEE faced several hurdles and delays due to ongoing legal battles with capital markets regulator SEBI. The deadline for the completion of the merger was initially set on December 22, 2023. However, it was later extended till January 20, 2023.

Following the development, the share price of Zee closed 5.94% higher at ₹171.20. In contrast to this, the broader BSE Sensex closed 801.44 points or 1.11% lower at 71,139.90. The company’s market capitalisation at the end of the trading session stood at ₹16,444 crore as more than 19.46 lakh shares exchanged hands on the BSE, as against the two-week average of 38.02 lakh shares. The company’s share price hit a 52-week low of ₹152.50 on January 23, 2024, a day after Sony called off the merger. The company’s share price hit a 52-week high of ₹299.50 on December 12 last year. 

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