Sony Taking Indian Regulator Order Over Planned ZEE Merger “Very Seriously”

Sony Taking Indian Regulator Order Over Planned ZEE Merger “Very Seriously”

June 21, 2023

Sony Pictures Entertainment is taking an interim regulatory order against ZEE Entertainment directors Subhash Chandra and Punit Goenka “very seriously,” despite concerns over what it could mean for the two companies’ merger.

The India Securities and Exchange Board (SEBI) last week issued an order banning ZEE founder and Chairman Emeritus Chandra and Managing Director Goenka from taking key roles at any listed company over allegations of insider trader.

That had led to speculation the plan to merger Sony Pictures Networks India and ZEE into one company could be impacted. The new business would span TV channels, film assets and streaming services SonyLIV and ZEE5 Global.

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Sony is planning to push on with the merger despite the increasingly uncertain backdrop, suggesting Indian press reports over the situation were incorrect.

“There have been several erroneous press reports recently speculating about the future of ZEE’s planned merger with SPNI following SEBI’s interim order against Subhash Chandra and Punit Goenka,” said an SPE statement issued from Culver City. “We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal.”

SEBI’s order claims Chandra and Goenka were siphoning off money from ZEE into Essel Group, ZEE’s parent company, effectively for their own financial gain.

There are fears previous regulatory greenlights of the merger will be scrapped if the situation worsens for ZEE’s management. The Competition Commission of India granted approval to the deal back in October 2022.

ZEE has appealed against the order but local reports say this has been rejected.

Last week, ZEE said it was reviewing SEBI’s order and taking legal advice.

“The board of directors of ZEE Entertainment Enterprises Ltd. has noted the interim ex-parte order issued by the Securities and Exchange Board of India, with respect to Dr Subhash Chandra and Mr Punit Goenka,” said ZEE Entertainment Enterprises Chairman R Gopalan in a statement. “The board is currently in the process of reviewing the detailed order, and appropriate legal advice is being sought in order to take the next steps as required.”

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