Zee-Sony merger: Will SEBI's new revelations impact March 12 NCLT hearing?
While there is no confirmation from the regulatory body on reports alleging discrepancies to the tune of $241 million in Zee accounts, stakeholders wonder if it will have any bearing on the critical March 12 NCLT hearing.
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Zee shares plunged close to 10 percent on unconfirmed reports of $241 million accounting discrepancies reported by Bloomberg on Wednesday morning. Stakeholders are now anxious if this will impact the crucial March 12 NCLT(National Company Law Tribunal) hearing, say insiders familiar with the matter.
Storyboard18 spoke to experts to gauge the potential impact on the hearing. “These facts may be prejudicial, however, they should not have much effect on the NCLT hearing. Sony has given clear reasons, which are justified through the contract for termination of the arrangement and they have to defend the same,” said advisory expert Deep Roy. Roy is the managing partner at boutique law firm Equilex.
“Moreover, SEBI (Securities and Exchange Board of India) has not yet concluded its investigation and these are preliminary reports. Courts will have to act on final findings,” said Roy.
As per the Bloomberg report, the regulatory body has discovered a significant discrepancy of over $240 million in the accounts of Zee Entertainment Enterprises Ltd. (Zee). This figure is roughly ten times larger than SEBI's initial estimates, raising concerns about financial irregularities within Zee.
However Zee denied all claims made by the media reports suggesting the same. The company spokesperson called the reports mere rumours that are incorrect and false.
In January, Mad Men Film a shareholder of ZEEL moved NCLT to consider the plea for enforcing the merger between Zee Entertainment Enterprises Limited and the Indian division of Sony Pictures Network that was terminated by the latter. Sony sent a termination notice to Zee on January 22, 2024.
Read More: NCLT issues notice to Sony in response to Zee’s plea of stalled $10 billion merger implementation
Some experts believe the reports on fund discrepancies if true will adversely impact the situation.
“After the fall out, Zee knocked on the NCLT doors for implementation of their agreement for merger. The new developments if found to be true will have an impact on the order as this investigation will become part and parcel of the proceeding and would show how Zee has knocked on the doors of NCLT with unclean hands. It is not just discrepancies but also suppression of facts for personal gain,” said Alay Razvi, Partner at Accord Juris LLP, Hyderabad.
