Punit Goenka, the chief executive of ZEE Entertainment, said the merger between ZEE and the Indian unit of Japan's Sony will go through, "whether or not" he is the CEO of the merged firm, quoting a newspaper article news agency Reuters reported. Goenka was set to become the merged entity's managing director and CEO, leading a $10 billion TV enterprise.
The markets regulator Securities and Exchange Board of India (SEBI) has imposed a one-year ban on Zee Entertainment's Chairman Subhash Chandra and CEO Goenka for being actively involved in diverting company funds to the group's related entities, raising questions on the future of the Zee-Sony merger.
"The ZEE-Sony merger holds immense significance, regardless of my position as CEO. The resulting entity will be under Sony's control, and they have chosen to retain me as a promoter, MD, and CEO," Goenka told the Economic Times.
Punit Goenka’s comments come after Sony on Wednesday said it took the SEBI’s ban on Chandra and Goenka "seriously" and will monitor developments that may affect the deal, which was announced in 2021. Zee, however, did not immediately respond to Reuters requests for comment.
"However, if the law prevents me from holding those positions, should the merger be allowed to fail? Such an outcome would negatively impact everyone involved in the ecosystem, as well as the sector as a whole," Goenka said.
Some analysts agreed with Goenka. "In case Punit (Goenka) does not get relief at the country's tribunal, the merger goes through without him with a Sony representative as CEO," analyst Karan Taurani of brokerage Elara Capital said.
Zee shares opened 2.6 per cent higher on Thursday and rose as much as 3 per cent during intraday trade.
The merger of Sony Pictures Networks India and Zee Entertainment Enterprises Ltd. 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.