Investors are waiting for clarity on the Zee-Sony merger. The Securities Appellate Tribunal (SAT) today rejected a stay on SEBI’s (Securities and Exchange Board of India) order that prohibits Zee Entertainment Chief Executive Officer Punit Goenka and Subhash Chandra from occupying crucial management positions in any publicly traded company. On the other hand, the National Company Law Tribunal (NCLT) has reserved its order, meaning there is still no clarity on whether the merger will go through.
As per Aditya Chopra, Managing Partner at Victoriam Legalis Advocates & Solicitors SAT’s decision to refuse a stay on SEBI’s order indicates that there continues to be substance and merit in SEBI’s allegations. SAT’s came after hearing extensive arguments.
“It was observed that the investigations were underway and SEBI’s actions were based on evidence relating to alleged siphoning of funds, and hence it saw no merit in interfering with the SEBI’s order. SAT further granted two weeks’ time to both the promoters to file a reply on the interim order before the SEBI,” explained Utsav Trivedi, Partner, TAS Law.
Trivedi also said, “SAT’s decision is likely to have an adverse effect on the merger deal between Zee and an Indian unit of Japan’s Sony Group to create a $10 billion TV enterprise, which was entered in 2021 since Goenka was set to be the director, CEO of the merged entity.”
The matter relating to the merger of the Zee enterprise and Sony Group is pending adjudication before the National Company Law Tribunal-Mumbai Bench (NCLT), after the National Company Law Appellate Tribunal (NCLAT) had set aside the order of NCLT which directed NSE and BSE to reconsider their approval for the Zee-Sony merger and the matter was sent back to NCLT to decide the issue after giving both the parties an opportunity to be heard.