As stakeholders seek clarity amid widespread speculation about the Zee-Sony merger, with the deadline today on January 20, Sony’s silence leaves everyone in the dark about developments.
“Good-faith negotiations are still on,” said insiders close to the development.
Meanwhile, the exchanges sought clarification from Zee Entertainment Enterprise Ltd (ZEEL) on January 19 regarding the merger update, prompted by media reports indicating a Sony board meeting to discuss developments.
In response, ZEEL said, “We would like to clarify that the company is not aware of, and cannot comment on, any board meeting held or proposed to be held by Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India Private Limited).
Read More: Zee-Sony Merger: BSE seeks clarification, ZEEL replies
“We wish to reiterate that the Company is committed to the merger with Sony and is continuing to work towards a successful closure of the proposed merger. We are engaging in good faith negotiations with Sony to discuss the extension of the date required to make the Scheme effective, by a reasonable period of time,” the company added in their response to the exchanges.
“We would also like to state that the Company has always complied with its obligations under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and will continue to make disclosures in accordance with the same,” they added.
The deal appears to be snagged on disagreements about who will lead the merged company, specifically concerns surrounding ZEEL MD and CEO,Punit Goenka.
Under the initial merger agreement, Zee Entertainment’s Punit Goenka was set to become the MD and CEO in the merged entity, with SPNI holding 50.86 percent, Zee’s promoters 3.99 percent, and 45.15 percent for public shareholders.
Read More: Zee-Sony merger: January 20 deadline sparks last-minute negotiations, what’s at stake
However, in August 2023, after NCLT (National Company Law Tribunal) approved the merger, SEBI (Securities and Exchange Board of India) prevented Goenka and his father from leadership roles in listed entities. SAT (Securities Appellate Tribunal) later overturned SEBI’s decision on October 30, allowing Goenka to hold managerial positions in listed companies.
But Sony did not want to budge from their decision of not having Goenka at the helm of the new company citing regulatory reasons.
Most experts however argued that the merger cannot go through without putting Goenka at the helm of the new company because any other alternative would mean not honouring the merger scheme.