Axis Finance Challenges Zee-Sony Merger Approval By NCLT
IDBI Bank has also lodged an appeal against the NCLT's decision to endorse the merger.
Axis Finance Ltd. has lodged an appeal against Zee Entertainment Enterprises Ltd. with the National Company Law Appellate Tribunal, in Delhi.
This appeal challenges the NCLT Mumbai bench's order from Aug. 10, which sanctioned the composite scheme of arrangement involving Zee Entertainment, Bangla Entertainment Pvt., and Culver Max Entertainment Pvt. (formerly Sony Pictures Networks India Pvt.).
The NCLT gave its nod to the merger in August this year after rejecting all objections. The tribunal has been considering the matter since July 10.
The merger between Zee and Sony was agreed upon in December 2021. After obtaining approvals from various regulators like the NSE, BSE, the Securities and Exchange Board of India, and the Competition Commission of India, the companies sought the tribunal's final approval.
However, the merger faced delays due to objections from creditors of the Essel Group. Creditors like Axis Finance Ltd., JC Flowers Asset Reconstruction Co., IDBI Bank Ltd., IDBI Trusteeship Ltd., and Imax Corp. were among those who objected to it.
At the heart of this dispute was a non-compete clause in the scheme that stated that Essel Mauritius, an Essel Group company, would receive Rs 1,100 crore as non-compete fees from SPE Mauritius, a Sony Group company, in exchange for Subhash Chandra's agreement not to compete with the resulting entity.