Subhash Chandra accused SEBI of trying to scuttle Zee-Sony merger

Almost a week before the termination of the $10 billion media merger between Zee Entertainment Enterprise (ZEEL) and Culver Max Entertainment, Essel Group Chairman Subhash Chandra, penned a letter to Finance Minister Nirmala Sitharaman.

According to media reports, in the letter dated January 16, he accused the Securities and Exchange Board of India (SEBI) of acting with a predetermined mindset to scuttle the merger deal. He also requested Sitharaman to “safeguard the interest of the minority shareholders of Zee”.

On January 22, Culver Max Entertainment (CME), erstwhile Sony Pictures Networks India, said that it issued notice to ZEEL terminating the agreement dated December 22, 2021, to merge ZEEL and CME.

In the letter Chandra wrote, "I am writing this letter to bring to your kind notice the efforts going on to scuttle investment/merger transaction, where Sony of Japan is supposed to invest $1.5 billion."

"I am not suggesting that SEBI should not investigate, if they have doubts of any kind. The Company and all other people are cooperating in the investigation, even the department has also summoned an ex-director, questioning him for over four hours. My concern is the timing of this new notice, and the urgency of the same since it matches with the merger completion timeline of ZEE and Culver Max," he added.

Furthermore, he stated that the notice does not contain any point which is not already a part of the Company's records that have already been provided to SEBI.

"I firmly believe that issuing a notice to the former directors of ZEE at this stage, appears to be an exercise to sensationalise the matter through media platforms. I had expressed my concerns earlier as well, in a letter to SEBI in November 2018 over negative forces impacting the valuation of Zee, but my requests went unnoticed," Chandra said.

The termination came after a deadlock between the firms regarding the leadership of the combined entity. Sony had reportedly objected to the condition in the term sheet to appoint Zee CEO Punit Goenka as CEO of the merged company amid an investigation into his conduct by India’s capital markets regulator.

Sony issued the termination letter following the conclusion of a 30-day grace period that concluded over the weekend. During this time, the two parties were unable to come to an agreement on a deadline established in late December.

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