Private lender IDBI Bank has filed an appeal against the NCLT order approving the merger of Zee Entertainment Enterprise Ltd (ZEEL) with Culver Max Entertainment, formerly Sony Pictures Networks India. The lender has moved the National Company Law Appellate Tribunal (NCLAT) against the order. Earlier, the Mumbai bench of the National Company Law Tribunal (NCLT) on August 10, 2023, approved the proposed merger, which would create the largest media entity in the country.
According to a regulatory filing by ZEEL, it "has been served with an appeal on behalf of IDBI Bank Ltd against the Company before the NCLAT, Delhi, challenging the order dated August 10, 2023, passed by NCLT, Mumbai Bench, approving the composite scheme of arrangement amongst ZEEL, Bangla Entertainment Private Limited and Culver Max Entertainment". The NCLT had dismissed the objections raised by several lenders of ZEEL, including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp.
Now, this order has been challenged before the NCLAT. However, the portal of the appellate tribunal is yet to reflect any filing from IDBI Bank. IDBI Bank is also contesting another matter against ZEEL before the NCLAT, in which the appellate tribunal has issued notice to the Subhash Chandra-family-led entertainment firm.
The private lender has challenged the NCLT order, which on May 19, rejected a plea to
initiate insolvency proceedings against the media major. In this matter, the Mumbai bench of NCLT on May 19, 2023, set aside the bank's plea, seeking insolvency against Zee Entertainment, observing that it was barred under Section 10A of the Insolvency & Bankruptcy Code (IBC).
In its order, the NCLT bench said that ZEEL, the corporate guarantor for the loan availed by Siti Networks -- the principal Borrower of IDBI Bank -- has committed a default. However, the default was committed during the timeline specified under section 10A of the IBC.
In December 2021,
Zee Entertainment and Sony Pictures agreed to merge their businesses. Both media houses approached the tribunal for sanctioning the merger after obtaining permissions from the National Stock Exchange, BSE and sectoral regulators, such as the Competition Commission of India and the Securities and Exchange Board of India.
