In a relief to Zee Entertainment Enterprises, the National Company Law Appellate Tribunal (NCLAT) on Friday set aside the National Company Law Tribunal’s (NCLT’s) order directing the BSE and NSE to review their approval to the Zee-Sony merger. The NCLT had passed the order on May 11 after markets regulator Sebi’s adverse ruling against an Essel group firm in April.

Setting aside the NCLT order for ‘violation of principles of natural justice’, a two-member NCLAT bench said that Zee should have been heard in the matter and has remitted the case back to NCLT.

Shares of Zee rallied over 6% on the BSE on Friday, soon after the NCLAT order. It settled at Rs 190.70 apiece at the end of the trade, up 6.69% against the previous day’s close.

Appearing for Zee, senior advocate Mukul Rohatgi argued that NCLT’s order had virtually nullified all the regulatory approvals received so far by the company as part of the merger process.

Apart from the BSE and NSE approval, the shareholders of Zee had already given their assent to the merger in October last year, weeks after the Competition Commission of India had given its conditional nod with some modifications.

The NCLAT order comes as a big relief to Zee, which has been trying to complete its merger with Culver Max Entertainment (formerly Sony Pictures Networks India) for some time now.

Announced in December 2021, the merger, according to analysts, will create a $10-billion media giant, with the combined entity owning over 70 TV channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures). Films India).

In Zee’s latest earnings call, MD & CEO Punit Goenka said that matters connected to the company had been addressed and that the media firm was taking all necessary steps within law to ensure there were no roadblocks to the merger process.

In the last few months, Zee has sought to settle its dues with financial and operational creditors as part of this effort to clear bottlenecks to the merger. This includes settling its dues with the Indian Performing Rights Society and IndusInd Bank, among others.

Last week, IDBI Bank’s insolvency plea against Zee was dismissed by the NCLT, while the company is in separate discussions with Axis Finance and JC Flowers & Co’s asset reconstruction unit to settle their dues with the firm.

Atlanta-based Invesco Developing Markets Fund, which until March last year held nearly 18% in Zee, exited the company last month.

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