Sony has sent notice to Zee over alleged unmet goals in merger agreement
ZEE Entertainment Enterprises Ltd (ZEEL) held a board meeting today to take note of the merger termination notice sent by Japan's Sony Group Corp.
The Japanese firm cited unmet conditions of the merger agreement as the reason for the termination in a letter sent to ZEEL today. The merger, which was announced more than two years ago, hit an impasse over the leadership of the merged company, amid a market regulator probe into Zee CEO Punit Goenka.
ZEEL in an exchange filing responded to the Sony notice, which also sought $90 million on account of alleged breaches by ZEEL of the merger cooperation agree (MCA) terms.
"ZEEL categorically denies all the assertions raised by Culver Max and BEPL on the alleged breaches under the terms of the MCA, including their claims for the termination fee," ZEEL said in the filing today.
Culver Max Entertainment Pvt Ltd was earlier known as Sony Pictures Networks India, and BEPL is short for Bangla Entertainment Pvt Ltd.
"... ZEEL also held several deliberations and good faith negotiations with Culver Max and BEPL, with a view to consider an extension of the merger completion timeline, that did not materialise," ZEEL said.
ZEEL said its managing director and CEO Punit Goenka was, during the discussions, agreeable to stepping down in the interest of the merger and proposals in this regard were discussed, including for appointment of a director on the board of the merged company, among other proposed steps.
"ZEEL's board of directors is evaluating all the available options. Basis the guidance received from the board, ZEEL will take steps to protect the long-term interests of all its stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL's claims in the arbitration proceedings," ZEEL said.
ZEEL chairman R Gopalan in the filing said they are evaluating the next steps and considering the appropriate course of action.
"... The board has noted that the company took all the required steps in the course of its integration journey over the last two years, to ensure that the scheme is implemented at the earliest. That said, the Board would like to assure its stakeholders that the company will take all the necessary actions, in the best interest of all stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL's claims in the arbitration proceedings," R Gopalan said.