Axis Finance, IDBI Bank & IDBI Trusteeship Withdraw Their Petitions Against Zee-Sony Merger

Axis Finance, IDBI Bank & IDBI Trusteeship Services have withdrawn their petitions before the appellate tribunal NCLAT filed against the NCLT order approving the merger of Zee Entertainment with Sony Pictures Networks India.

The National Company Law Appellate Tribunal (NCLAT) allowed the withdrawal of the petitions noting that the NCLT earlier this month had already recalled its earlier order of August 10, 2023, approving the merger of Zee Entertainment with Sony Pictures Networks India. "Learned counsel for the appellants submit that NCLT has already withdrawn the merger scheme. Hence the appellants pray that they may be permitted to withdraw the appeals.

Prayer is allowed," said an NCLAT bench comprising Chairperson Justice Ashok Bhushan and Member Barun Mitra. Earlier this month, the Mumbai bench of the National Company Law Tribunal (NCLT) recalled its order passed on August 10, 2023, in which it had approved the merger of Zee Entertainment with Sony Pictures Networks India.

NCLT had recalled the order after ZEE applied for withdrawal. It had submitted the Composite Scheme 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.

On August 27, ZEE Entertainment and Sony Pictures Networks India announced settling their six-month-long dispute related to the failed USD 10-billion merger and have agreed to withdraw all claims against each other. The Mumbai Bench of NCLT had earlier on August 10, 2023, approved the merger of ZEEL and Sony, which could have created a USD 10.5 billion media entity in the country. IDBI Bank and Axis Finance have challenged the August 10, 2023, order of the Mumbai bench of the NCLT.

While approving the merger, NCLT in its order had dismissed some applications moved by financial institutions opposing the move, including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co, and Imax Corp.

This was challenged by IDBI and Axis Finance before NCLAT. 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. ZEEL and SPNI had agreed to merge on December 22, 2021.