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NEW DELHI: In a recent turn of events, a Singapore arbitrator has reportedly agreed to let Zee Entertainment ask National Company Law Tribunal (NCLT) to enforce a $10 billion merger with Sony‘s India unit that was scrapped by the Japanese firm.
According to Reuters, the emergency arbitrator denied Sony’s application for emergency interim relief, saying it had no jurisdiction or authority to block Zee from approaching the tribunal.
Earlier, Zee Entertainment had asked NCLT-Mumbai to order Sony to close the $10-billion merger that the Japanese giant scrapped after more than two years of negotiations.
The Punit Goenka-helmed Zee Entertainment also contested Sony’s claims that it breached its obligations in the merger pact before the Singapore International Arbitration Centre. Sony had moved the Singapore tribunal seeking $90 million as termination fees for Zee’s failure to fulfill the merger conditions.
Subhash Chandra, founder of Zee, accused the market regulator for trying to scuttle the merger. In a letter to finance minister Nirmala Sitharaman, sent six days before Sony called off the merger, Chandra wrote: “While Zee and the people have been cooperating with Sebi on its investigation related to alleged fund diversion by promoters, the timing of a new notice issued by the regulator to former directors, matching with the deadline of the merger, raises concern.”
Chandra also pointed out that the notice does not even contain any new points. “I’m not suggesting that Sebi should not investigate if they have doubts of any kind… issuing a notice at this stage appears to be an exercise to sensationalise the matter.” Chandra further added: “If the mentioned parties continue to influence the investigations, especially by Sebi, it will lead to a huge financial loss for the company’s minority shareholders.”
According to Reuters, the emergency arbitrator denied Sony’s application for emergency interim relief, saying it had no jurisdiction or authority to block Zee from approaching the tribunal.
Earlier, Zee Entertainment had asked NCLT-Mumbai to order Sony to close the $10-billion merger that the Japanese giant scrapped after more than two years of negotiations.
The Punit Goenka-helmed Zee Entertainment also contested Sony’s claims that it breached its obligations in the merger pact before the Singapore International Arbitration Centre. Sony had moved the Singapore tribunal seeking $90 million as termination fees for Zee’s failure to fulfill the merger conditions.
Subhash Chandra, founder of Zee, accused the market regulator for trying to scuttle the merger. In a letter to finance minister Nirmala Sitharaman, sent six days before Sony called off the merger, Chandra wrote: “While Zee and the people have been cooperating with Sebi on its investigation related to alleged fund diversion by promoters, the timing of a new notice issued by the regulator to former directors, matching with the deadline of the merger, raises concern.”
Chandra also pointed out that the notice does not even contain any new points. “I’m not suggesting that Sebi should not investigate if they have doubts of any kind… issuing a notice at this stage appears to be an exercise to sensationalise the matter.” Chandra further added: “If the mentioned parties continue to influence the investigations, especially by Sebi, it will lead to a huge financial loss for the company’s minority shareholders.”
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