Sony Pictures Entertainment (SPE) on Wednesday said that it is taking SEBI's interim regulatory order against ZEE Entertainment directors Subhash Chandra and Punit Goenka “very seriously,” and that the company will continue to monitor developments that may affect the merger deal with Zee Entertainment Enterprises Ltd.
Last week, the Securities and Exchange Board (SEBI) imposed a ban on ZEE founder and Chairman Emeritus, Subhash Chandra, and Managing Director, Punit Goenka, from holding key positions in listed companies due to insider trading allegations. This development raised concerns about the potential impact of the planned merger between Sony Pictures Networks India and ZEE.
"There have been several erroneous press reports recently speculating about the future of ZEE's planned merger with SPNI (Sony Pictures Networks India) following SEBI's interim order against Subhash Chandra and Punit Goenka. We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal." the company said, as per PTI.
The merger of Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) was announced on December 21, 2021. Under the merger, Sony will acquire a majority stake of 50.86 per cent, while Zee's promoters will hold 3.99 per cent, and the remaining stake will be owned by Zee's other shareholders. Punit Goenka, the current MD, and CEO of ZEEL, will continue to hold the same position in the merged company. The combined entity of Sony and Zee will encompass more than 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India), positioning it as the largest entertainment network in India.
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Following the SEBI interim order, Chandra and Goenka have appealed the decision at the Securities Appellate Tribunal. Regulatory action was taken against them for the alleged siphoning off of funds. Shareholders of ZEEL had given their ascent to the merger last year in October, weeks after the fair trade regulator Competition Commission of India gave its conditional nod.