No insolvency for Zee: IDBI’s plea dismissed by Appellate Tribunal

The National Company Law Appellate Tribunal (NCLAT)has dismissed IDBI Bank's plea seeking insolvency proceedings against Zee Entertainment. The NCLAT upheld the earlier order by the National Company Law Tribunal (NCLT), which rejected IDBI's plea against the media company.

In an official communication addressed to the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), ZEEL confirmed that the appellate tribunal upheld the NCLT's order.

The development follows ZEEL's earlier disclosure on August 1, 2023, in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In that filing, the company had informed stakeholders of the ongoing legal proceedings initiated by IDBI Bank.

“We are pleased to inform that the NCLAT has upheld the order passed by NCLT, thereby dismissing the appeal by IDBI Bank,” the statement from ZEEL read.

The appellate tribunal has also granted IDBI Bank the liberty to file a fresh plea against Zee Entertainment for defaults beyond the Covid moratorium period. IDBI Bank had sought insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL) to recover dues of ₹149.60 crore.

IDBI Bank, in its petition, claimed that Zee agreed to secure loans extended to Siti Networks through a Debt Service Reserve Account (DSRA) Guarantee. The lender says Siti Networks had to maintain the DSRA. It alleged that Zee submitted a guarantee and was responsible for any shortfalls in the DSRA. It adds that the media firm was informed about the shortfalls.

Zee opposed the lender’s plea and sought its dismissal. It also opposed the issuance of a notice. Earlier in May 2023, the Mumbai bench of the NCLT had dismissed the bank’s insolvency plea against Zee.