Zee Entertainment Enterprises Ltd has asserted that Sony Pictures had a predetermined agenda to terminate the merger agreement, as disclosed in Zee’s petition filed before the National Company Law Tribunal (NCLT). The petition claims that, despite ZEE’s good-faith efforts during the 30-day discussion period, Sony rejected proposals for a six-month extension to consummate the transaction. Zee is now seeking NCLT intervention for the implementation of the merger.
Zee’s petition alleges that Sony, instead of engaging in discussions on alternative closing timelines, chose to terminate the agreement and level false allegations of breaches and non-compliance against ZEE. The dispute stems from Sony Pictures’ decision to call off the anticipated $10 billion merger, citing non-fulfillment of Conditions Precedent (CPs) in its termination letter sent on January 22.
Following the midnight termination letter, Sony promptly initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC), seeking a $90 million termination fee from Zee for alleged breaches. Zee, feeling aggrieved, immediately announced its intention to seek relief from both NCLT and SIAC.
Zee contends that Sony was well-informed about compliance status at every stage and had even sought NCLT approval while affirming its commitment to completing the merger despite purported non-compliances. The petition points out that both parties were obligated under the merger agreement to apply to the Ministry of Information and Broadcasting (MIB) for necessary approvals related to the transfer of licenses for television channel up-linking and down-linking to the merged entity. Zee asserts that Sony’s failure to file the application with MIB is solely attributable to Sony’s omission.
Additionally, ZEE highlights procedural lapses, such as Sony’s non-compliance with obtaining MIB approval and security clearance from the Ministry of Home Affairs for Punit Goenka’s appointment as the merged company’s managing director and CEO.
In October, reports surfaced about Sony exploring a potential acquisition of its India business by Walt Disney Co. as part of a contingency plan in case the ZEE-Sony merger faced delays or fell through. Zee promptly sought a public denial from Sony, which responded by stating adherence to the principles outlined in the merger cooperation agreement (MCA) but did not directly address the reported acquisition discussions with Walt Disney.