The National Company Law Appellate Tribunal (NCLAT) on Friday set aside an order by the National Company Law Tribunal (NCLT) order directing bourses NSE and BSE to review their approval to Zee Entertainment’s merger with Sony. NCLAT has remanded the case back to NCLT to decide on the issue after hearing both sides.

This appeal came after the NCLT asked to NSE and BSE to review their no objection certificate to the merger, in light of SEBI’s dictat against one of the Essel Group companies. Essel Group is the promoter entity for Zee Entertainment Enterprises. 

Also read: Zee-Sony merger to close in first half of FY24: Kenichiro Yoshida

The NCLAT held that as per principles of “natural justice,” Zee should have been heard by NCLT before the NSE and BSE the order. Zee had no occasion to respond to the concerns raised, it added. Thus, the NCLT order is being set aside for violating principles of natural justice. 

SEBI order

Zee claimed during the appeal that the NSE and BSE that granted approval to the merger last year have suddenly cited a Securities and Exchange Board of India (SEBI) order against a sister company of Zee.

It added that SEBI has already examined the deal, evaluated the non-compete clause and granted its nod. The firm has also received approval from the Competition Commission of India (CCI).

“We were not heard and allowed an opportunity to respond to BSE and NSE citing a SEBI order against our sister company, NCLT should have at least heard us.”

Also read: Our focus is on timely completion of Zee-Sony merger: Punit Goenka

Now the case is back at the NCLT, where Zee has the opportunity to argue against the SEBI directive. 

About the merger

In September 2021, Sony Pictures Networks India and ZEEL entered into a non-binding term sheet to bring together their linear networks, digital assets, production operations, and programme libraries. The combined entity will own over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), making it the largest entertainment network in India.

Experts indicate that with the NCLAT order, the merger should be approved in six to eight weeks.

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