Zee Entertainment claims Sony's 'pre-determined' termination: Report

It suggests that Sony began making 'false and baseless' claims of non-compliance with ZEE.

According to a report on Mint, Zee Entertainment has claimed in its appeal to the National Company Law Tribunal (NCLT) that Sony Pictures was 'pre-determined' to end the merger agreement. It says that ZEE, operating in good faith, suggested extending the transaction's completion date by six months within the 30-day discussion period. To carry out its merger, Zee has contacted the NCLT.

Sony was willing to discuss alternative closing timelines, but it was revealed that it was determined to terminate the merger agreement, rejecting ZEE's proposal and not providing a counter proposal for an extension. Instead, it made false allegations of breaches and non-compliance, according to Zee's petition.

Sony Pictures has called off a USD 10 billion merger with Zee due to non-fulfillment of conditions. The merger was approved by the NCLT in August last year. Sony demanded a USD 90 million termination fee from Zee for alleged breaches of the agreement. The dispute is pending before the Singapore International Arbitration Center. The termination letter was sent at midnight and another arbitration application was sent shortly after.

Zee took legal action and informed exchanges to seek relief from the NCLT and SIAC. The company claimed that Sony was aware of the non-compliance and sought approval from NCLT. The petition also stated that under the merger agreement, both companies were required to apply to the Ministry of Information and Broadcasting (MIB) for approvals to transfer ZEE's licenses related to the up-linking and down-linking of television channels to the merged entity.

Sony has not filed an application with the MIB due to its failure to comply with requirements for Punit Goenka's appointment as managing director and CEO of the merged company. Sony also failed to obtain approval from the ministry of home affairs for the appointment. In October, Sony had discussed a potential acquisition of its India business with Walt Disney as part of a contingency plan in case the merger between ZEE and Sony fails.

Sony has stated that it has followed the principles outlined in the merger cooperation agreement and will not jeopardise the merger process, but has not provided any clarification or deny the development regarding its acquisition with Walt Disney.