Zee insolvency: NCLAT to hear Puneet Goenka’s appeal today
2 min read . Updated: 24 Feb 2023, 09:22 AM IST
PremiumPuneet Goenka, the managing director and chief executive of Zee Enterprises, has moved NCLAT to challenge the admission of bankruptcy proceedings against Zee.
Zee Entertainment's petition for relief from insolvency proceedings has been scheduled for consideration by the National Company Law Appellate Tribunal (NCLAT) on February 24.
Puneet Goenka, the managing director and chief executive of Zee Enterprises, appealed the decision by the National Company Law Tribunal (NCLT) to allow IndusInd Bank to file for insolvency proceedings against the company. According to a formal statement from the company, Goenka appealed the NCLAT on February 23 in an effort to get the Mumbai bench ruling of the NCLT overturned.
"Goenka is taking all the necessary steps as per law to protect the interests of all stakeholders of Zee Entertainment Enterprises (ZEEL) and to achieve a timely completion of the proposed merger with Culver Max Entertainment," the company statement read.
The timing of the development is crucial since ZEEL and Culver Max Entertainment (Sony) are nearing completion of their merger, which will result in one of the biggest mergers in the media and entertainment industry.
Experts predict that the recent development will cause difficulties for the deal, with some arguing that the admission of insolvency renders the powers of the corporate board superfluous.
The problem stems from a default of ₹89 crore by Siti Networks, the multisystem operator division of the Zee Group, which was asserted by the IndusInd Bank and for which ZEEL served as a guarantee. The private sector lender has filed an insolvency petition against Siti Networks with the NCLT. The NCLT has identified Mohit Mehra as the resolution specialist in this case.
The petition of private sector lender IndusInd Bank was accepted on February 22 by a division bench consisting of judicial member H V Subba Rao and technical member Madhu Sinha. Sanjeev Kumar Jalan was also appointed as the resolution professional in the case.
ZEEL, according to the current bankruptcy regulations, can settle the debt with the lender from the private sector, preventing problems for the merger. Even though the merger has already gotten numerous statutory approvals, some of the lenders are certain that they must pay their outstanding debts first. A counsel for ZEEL requested for a two-week stay on the order, but the same was rejected by the NCLT.
(With agency inputs)