Zee Entertainment is planning to take legal action against Sony Group after the Japanese company ended a $10 billion merger in India, the media house said in a regulatory filing on Monday.
ZEE said, in its board meeting held on Monday, it acknowledged communications from Culver Max Entertainment Pvt. Ltd. (formerly Sony Pictures Networks India) and Bangla Entertainment Pvt. Ltd. (“BEPL”) to terminate the Merger Co-operation Agreement dated December 21, 2021 and sought a termination fee of $90 million on the grounds of alleged breaches by ZEEL (Zee Entertainment Enterprises Ltd.) of the MCA terms.
“ZEEL categorically denies all the assertions raised by Culver Max and BEPL on the alleged breaches under the terms of the MCA, including their claims for the termination fee,” it said in the regulatory filing.
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The Mumbai-based media conglomerate said that it made every effort and took all necessary steps in accordance with the approved MCA, sanctioned by shareholders and regulatory authorities. Zee said it has consistently prioritised the implementation of the specified scheme in the shareholders’ best interest. It claimed that it engaged in multiple discussions and good-faith negotiations with Culver Max and BEPL to explore the possibility of extending the merger completion timeline, but unfortunately, these efforts did not come to fruition.
Zee to move court against Sony
Zee is evaluating all the available options including considering appropriate legal action, it said in the regulatory finding.
“The Board would like to assure its stakeholders that the Company will take all the necessary actions, in the best interest of all stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings. The Board has complete faith in the highly experienced senior management of the Company and will continue to guide the team,” said. R. Gopalan, chairperson, Zee.
‘Punit Goenka was willing to step down’- Zee
The statement further added that Punit Goenka, MD & CEO of Zee, was “agreeable to stepping down in the interest of the merger”.
Discussions were held on related proposals, including the appointment of a director to the Board of the merged company and provisions for the conduct of ongoing investigations and legal proceedings in the best interest of Zee’s directors and shareholders, it said. Subsequently, modifications to the scheme were proposed to incorporate these considerations, it added.
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The statement further added that Zee suggested an extension of up to six months for the transaction’s completion; however, Sony did not provide any counter-proposal for an extension but “rather have chosen to terminate”.