Zee Entertainment Enterprises Ltd (ZEEL)’s Punit Goenka’s position as MD and CEO of the merged Zee-Sony enterprise is becoming more improbable by the day as Goenka continues to be under the scanner of the Securities and Exchange Board of India (SEBI) for the alleged misappropriation of funds.
Sony Group Corp has been pushing for its own India executive NP Singh to become the CEO of the newly forming Zee-Sony entity. Even though Goenka had been given some relief by the Securities Appellate Tribunal (SAT), they have mentioned that if there is any new development, SEBI can take legal action against him, according to a report published in the Economic Times.
Sony’s recommendation of a new CEO, keeping in mind the stringent corporate governance norms in Japan and the US, has proved to be a new hindrance in the completion of the merger as Goenka’s appointment as MD and CEO was a necessary condition for the merger.
While both parties are trying to find a way out, this has proved to be a cumbersome issue. Goenka has apparently made it clear that he wants to be the MD and CEO, especially after SAT overturned SEBI’s decision of not allowing him to hold directorial roles.
This decision by the SAT comes in the wake of the impending merger between Zee Entertainment and Culver Max Entertainment (Sony Pictures India), a merger that has been the talk of the town since its announcement in 2021.
There are indications that the market regulator may escalate the matter to the Supreme Court, as per a news report.
Despite the merger gaining approval from regulators, legal hurdles, primarily centered around loan defaults by a Zee group entity, had caused delays.
This merger is set to create a media powerhouse worth $10 billion.