Zee-Sony merger failure: Impact of NP Singh’s decision to move on from his position at SPNI
One of the key disagreements between both Zee and Sony was around the leadership of the merged entity. While Sony wanted NP Singh at the helm, Zee wanted to stick to initial agreements where Punit Goenka was to take charge as the head. Now Singh is moving on from his role as MD and CEO at SPNI.
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After two years of talks, the mega merger of Sony and Zee collapsed when the former pulled the plug in January 2024. A major bone of contention that emerged as one of causes of termination was the leadership issue and disagreements over who would lead the merged entity. Sony wanted NP Singh, MD and CEO of Sony Pictures Networks India and Zee resisted, insisting on Punit Goenka, MD and CEO of ZEEL to helm the merged company. On May 24, Singh announced he is moving on from the CEO and MD position at SPNI and plans to transition into an advisory role. This comes five months after the merger termination.
Other than a long list of regulatory troubles, Sony and Zee faced hurdles in finalising their proposed merger due to a deadlock over leadership arrangements for the merged entity.
But had NP Singh announced his decision to move on from his current role as the MD and CEO (not yet effective), would the fate of the merger changed?
A media and entertainment industry executive shared with Storyboard18 that the whole deal falling through is a huge thing for Sony Corporation, which is a US and Tokyo-listed company. It wasted two years on this deal, the executive shared, on the condition of anonymity, adding that the deal didn't go through since they are apprehensive about corporate governance issues. But what about Singh’s announcement now? “When they (Sony) knew that there are so many issues of corporate governance, somebody has to be held responsible from a Sony Corporation point of view and there are two people in my view — either Ravi Ahuja (COO and President, Sony Pictures) or NP Singh, who is kind of a price for that.” Otherwise, the company has been doing well and Singh himself has had a fantastic run at the firm, he added.
In fact, the buzz in leadership corridors is that the company has been grooming Danish Khan as Singh's successor for a while now, as per industry sources. Khan is the business head for Sony LIV and Studio NEXT.
Another industry insider shared with Storyboard18 that it wasn’t Sony pushing NP Singh specifically to run for the role (as the chief of the merged entity). “Sony wanted ‘their’ person to run it and it so happened that NP was the person there. Sony wanted to control and they didn't seem to because of all the SEBI issues around Goenka,” he noted.
“I imagine for Sony, he was the most trusted executive and at the point of the time, Singh was (and still is) very much at the company,” said another media executive.
It was September 2021, when the two media giants first announced the merger and as per the arrangement, Goenka was designated to lead the merged entity with Sony holding a 50.86 percent stake, ZEEL promoters holding a 3.99 and the remaining 45.15 percent to be with public shareholders.
However, Sony wasn’t ready to comply with Zee's stance, particularly given the circumstances surrounding Goenka. Securities and Exchange Board of India (SEBI) had banned Goenka and Essel Group Chairman Subhash Chandra from holding directorships in Zee Group companies due to the then ongoing probe into allegations of fund diversion. Days before the deadline for the merger, Goenka offered to step down but disagreed with Singh leading the deal.
Eventually, after more than two years of the announcement and subsequent negotiations, Sony terminated the deal on January 22, alleging Zee's failure to meet merger conditions, despite extending the closing period by a month. The latter, however, maintained its willingness to meet most conditions.
