NCLAT Refuses To Grant Stay On Zee Sony Merger

The National Company Law Appellate Tribunal (NCLAT) refused to grant a stay on the merger of media giants Zee Entertainment Enterprises Limited (ZEEL) and Sony. However, the law body has issued notice to hear a plea on the same matter on 8 January.

The Challenging parties were Axis and IDBI Bank. Earlier, IDBI approved the loan to Essel Group on the guarantee of the ZEEL. The bank argued that they may not recover the loans if the merger is progressed. They, thus, asked NCLAT to stay the progress of the merger.

However, ZEEL said to the court that both IDBI and Axis Finance lack the legal standing to submit the plea. ZEEL further informed the court that these companies lack the necessary lending capacity or share capital according to the law to oppose the Zee-Sony merger.

The NCLAT acknowledged that the merger is upon the court's orders and they cannot suspend it without considering the case on its merits. Consequently, the appellate tribunal instructed the submission of responses and postponed the case to 8 January.

The NCLT on 10 August approved the merger of Zee Entertainment and Sony Pictures Networks India, paving the way for the creation of a USD 10-billion media giant in the country.