The National Company Law Appellate Tribunal (NCLAT) has set aside the order of NCLT directing bourses NSE and BSE to reconsider their approval for the Zee-Sony merger.
A two-member NCLAT bench has asked NCLT to consider the merger of Zee Entertainment with Culver Max Entertainment (earlier known as Sony Pictures Networks India) afresh, after hearing all the parties.
The appellate tribunal order came on hearing the appeal filed by Zee Entertainment Enterprises (ZEEL) against the order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) on May 11, 2023.
The NCLT had directed NSE and BSE to reconsider their prior approvals for the merger of ZEEL and Culver Max Entertainment. It had also asked the bourses to reassess the non-compete fee under the clause of the merger.
The said order was challenged by ZEEL before the appellate tribunal, contending that it was not granted adequate opportunity by the NCLT to present its side and it didn't follow the principles of natural justice.
Moreover, it also contended that the NCLT doesn't have jurisdiction over non-compete issues.
As per the scheme of the arrangement, Sony will indirectly hold 50.86% of the combined company. The founder of Zee will own around 4% and the rest will be with the other shareholders of ZEEL.
Moreover, Sony Group will also pay a non-compete fee of Rs 1,100 crore to Essel Group promoters.
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