BREAKING: ZEE and Sony resolve all disputes over failed merger
Zee Entertainment, Culver Max Entertainment, and Bangla Entertainment have reached an amicable settlement, resolving all disputes pertaining to merger cooperation agreement and scheme of arrangement
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ZEE Entertainment Enterprises Ltd. (ZEE), Culver Max Entertainment Pvt. Ltd. (CMEPL)operating as Sony Pictures Networks India (SPNI), together with its group company Bangla Entertainment (BEPL), have arrived at a comprehensive non-cash settlement, amicably resolving all disputes related to the Merger Co-operation Agreement and the Composite Scheme of Arrangement.
Zee Entertainment Enterprises Ltd share price jumped as much as 15 percent on August 27 after the company said it has entered into an agreement to settle all disputes with Sony regarding the failed merger.
As part of the settlement, the companies have mutually agreed to withdraw all respective claims against each other, in the ongoing arbitration at the Singapore International Arbitration Centre, and all related legal proceedings initiated in the National Company Law Tribunal (NCLT) and other forums.
The companies will also withdraw the respective Composite Schemes of Arrangement from the NCLT and inform the relevant regulatory authorities.
Under the terms of the settlement, none of the parties will have any outstanding or continuing obligations or liabilities to the other.
The settlement stems from a mutual understanding between the companies to independently pursue future growth opportunities with a renewed purpose and focus on the evolving media and entertainment landscape, signifying the definitive conclusion of all disputes.
It was September 2021, when the two media giants first announced the merger and as per the arrangement, Punit 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.
Read more: Zee-Sony merger failure: Impact of NP Singh’s decision to move on from his position at SPNI
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.
