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NCLAT holds off on issuing an IDBI order as Axis Bank protests the Zee-Sony merger: Report
The tribunal will decide on April 15 whether legal challenges to the Zee-Sony merger can be heard after the merger is called off.
According to a report on Mint, The National Company Law Appellate Tribunal (NCLAT) has postponed making a decision regarding the appeals submitted by Axis Bank and IDBI Bank contesting the canceled Zee-Sony merger. On April 15, the appeal tribunal will decide on the possibility of hearing challenges to the merger's legal sanction after the merger has been canceled.
To give the NCLT time to consider Zee's request to compel the merger, IDBI Bank and Axis Bank have asked the NCLAT to postpone the ongoing litigation. Zee, however, requested NCLAT to continue hearing the issue, claiming that the status of the plea in NCLT will not affect the current case.
On August 10, the Mumbai bench of the NCLT approved the merger of Zee Entertainment and Sony Pictures Networks India (SPNI), paving the way for the creation of a $10-billion media giant in the country. Dissenting creditors, including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank Ltd, and others, took issue with a non-compete clause in the merger deal. In December, NCLAT refused to put an interim stay on the merger and deferred the case to January.
Zee alleges that the decision to terminate the merger was premeditated and incurred costs of ₹700 crore or $80 million to comply with the requirements in preparation for the merger. The case is pending with the NCLT.
The merger of Zee Entertainment and Sony Pictures Networks India was granted approval by the Mumbai bench of the NCLT on August 10, opening the door for the establishment of a $10 billion media conglomerate in the nation. A non-compete clause in the merger agreement was contested by dissenting creditors, which included Axis Finance, JC Flower Asset Reconstruction Co., IDBI Bank, and others. NCLAT postponed the case until January in December after declining to impose an interim halt on the merger.
According to Zee, the decision to call off the merger was planned and required spending Rs 700 crore, or $80 million, in order to comply with the necessary regulations. The NCLT is still handling the matter.