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The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday directed Zee Entertainment to convene a shareholders' meet on October 14 for approving the merger with Culver Max Entertainment (formerly Sony Pictures Network).
The order, passed on August 24, but uploaded to the bourses on Wednesday, comes close on the heels of the Competition Commission of India (CCI)'s observation that the $10-billion merger could hurt competition and that greater scrutiny of the deal was needed.
"This Tribunal hereby directs that a meeting of the equity shareholders of the applicant company (Zee) be convened and held on Friday, October 14, 2022 at 4 p.m. for the purpose of considering, and if thought fit, approving the proposed scheme," the NCLT order read.
A Zee Entertainment spokesperson reiterated the same point in a statement released on Wednesday.
Last week, Zee had written to CCI after its initial observations became public, citing latest TV viewership data that showed that the merged entity would have lower market share and wouldn't lead to concentration of power.
Zee had submitted TV viewership data for the financial year ended March 2022 and year-to-date data for the ongoing fiscal (FY23).
The data showed that the shares of four channels of the merged entity had come down compared to financial year ended March 2021–the data used by the CCI to scrutinise the Zee-Sony merger.
Some legal experts had said that the proposed merger could go through if these adjustments were made.
The NCLT order also comes a month after Zee announced that it had received approval from BSE and the National Stock Exchange for the merger with Sony, paving the way for the merger process to move to the next stage.
Last December, the companies had signed definitive agreements to merge Zee into Sony and combine their linear TV networks, digital assets, production operations and programme libraries.
The transaction would create the second-largest entertainment network, after Disney-Star in India, analysts had said back then.
The merged company would retain Zee’s stock market listing, though Sony would provide a large cash injection and control a majority shareholding of close to 51 per cent.
Zee’s Punit Goenka would lead the combined company as MD and CEO.
The majority of the board of directors would be nominated by the Sony Group and would include the current MD and CEO, N P Singh.
