The National Company Law Appellate Tribunal (NCLAT) on Thursday said that it would hear the plea by IDBI Bank on August 31 seeking insolvency proceedings against Zee Entertainment to recover dues of Rs 149.6 crore.
This comes months after the National Company Law Tribunal dismissed all objections in the merger case and approved the merger of Zee Entertainment and Sony India.
IDBI Bank had filed the plea in December 2022 before the Mumbai bench. IDBI Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming to be a financial creditor, before NCLT for initiation of Corporate Insolvency Resolution Process against the company.
IDBI Bank’s claim is based on Zee’s debt service reserve account (DSRA) guarantee. The public sector lender alleged ZEE provided to secure loans provided by IDBI Bank to Siti Networks Ltd — both were part of Essel Group.
IDBI Bank insisted before the NCLT that its claim is identical to that of IndusInd Bank and on that ground, the application must be permitted.
IndusInd Bank had filed a similar plea against ZEE, which was admitted by the NCLT on February 22.
However, the National Company Law Appellate Tribunal (NCLAT) granted relief against the NCLT order to the media company. Later in March, ZEE entered into a settlement agreement with IndusInd Bank.
On August 11, NCLT approved the merger of Zee Entertainment Enterprises Ltd and Culver Max Entertainment (erstwhile Sony Pictures Networks India or SPNI).
Zee and Sony inked a definitive agreement at the end of 2021, to combine the television network networks of both apart from digital assets, product operations and program libraries. After the merger, Sony’s shareholders will hold 50.86 per cent of the combined entity, while Zee’s promoters will hold 3.99 per cent, ZEEL’s shareholders will hold the remaining 45.15 per cent.