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The National Company Law Tribunal has admitted an Indusind Bank plea for insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL).
The division bench of judicial member H V Subba Rao and technical member Madhu Sinha on Wednesday also appointed Sanjeev Kumar Jalan as the resolution professional in the matter.
The matter pertains to a default of Rs 89 crore by Zee Group's multisystem operator arm Siti Networks claimed by Indusind Bank, for which ZEEL was a guarantor.
The private sector lender has also filed a separate insolvency petition against Siti Networks at the NCLT.
The NCLT has appointed Mohit Mehra as the resolution professional in this matter.
The NCLT has admitted the plea at a time when ZEEL is in advanced stages of merging with Sony in one of the biggest deals in the media and entertainment sector.
According to experts, the development is bound to create hurdles in the deal, with some opining that the powers of a company board stand superseded with the admission of insolvency plea.
As per the existing bankruptcy laws, ZEEL can settle the dues with the private sector lender, which can help avoid troubles for the merger.
The merger has already received multiple statutory clearances, but some of the lenders are insisting on clearing their dues before moving ahead.
A counsel for ZEEL requested for a two-week stay on the order, but the same was rejected by the bench. Zee can appeal against the order in the National Company Law Appellate Tribunal.
A copy of the order is yet to be uploaded on the NCLT website.
As per reports, Siti, which owes over Rs 850 crore to various lenders, had taken a loan from Indusind Bank where ZEEL was the loan guarantor under the Debt Service Reserve Account Guarantee Agreement.
Earlier, the bank had approached Delhi high court and filed its plea in the NCLT in February this year.
The ZEEL stock fell 3.35 per cent to close at Rs 199 a piece on the BSE on Thursday.