NCLT recalls order on Zee-Sony merger, allows withdrawal of scheme

The National Company Law Tribunal (NCLT) has allowed withdrawal of its order approving the merger of Zee Entertainment and Sony Pictures Networks India and recalled its earlier order passed in this regard.

The Mumbai bench of the NCLT had last week recalled its order passed on August 10, 2023, in which it had approved the merger of Zee Entertainment with Sony Pictures Networks India.

The bench observed the parties have "mutually consented" to withdraw the scheme on account of the settlement agreement and the board of directors has passed the resolutions to withdraw the scheme of amalgamation.

"Accordingly, this Bench allows the withdrawal of the Scheme of Amalgamation and hereby recalls order dated 10.08.2023 in C.P.(CAA) No. 209 of 2022," said NCLT order, a copy of which was shared to bourses by Zee on Thursday.

Zee, which applied for withdrawal, submitted the Composite Scheme of the Merger Cooperation Agreement executed to give effect to this scheme stands terminated and accordingly the closing date has not occurred and the scheme has not attained any effectiveness.

Earlier on August 27, ZEE Entertainment and Sony Pictures Networks India announced settling their six months long dispute related to the failed USD 10-billion merger and agreed to withdraw all claims against each other.

As part of that, both had mutually agreed to withdraw all respective claims against each other in the ongoing arbitration at the SIAC and all related legal proceedings initiated in the NCLT and other forums, a joint statement stated.

Both Zee and Sony had claimed a termination fee of USD 90 million (around Rs 748.7 crore) from each other for not complying to the Merger Cooperation Agreement (MCA) signed in December 2021.

In January this year, Sony had pulled out from the proposed USD 10.5-billion merger with ZEE Entertainment Enterprises Ltd citing failure to meet certain "closing conditions" by the Indian firm.

ZEE and SPNI agreed to merge on December 22, 2021.