By – Shubhendra Singh Rajawat
Sony is seeking to cancel its merger with Zee Entertainment, which was announced more than two years ago.
According to Bloomberg, Sony plans to cancel its merger with Zee Entertainment, which was announced more than two years ago.
According to the source, the Japanese conglomerate is likely to cancel the deal due to a disagreement over whether Zee CEO Punit Goenka, who is also the founder’s son, will run the merged business.
Goenka would lead the new company, according to the agreement inked in 2021. However, Sony does not want him as CEO in the midst of a regulatory investigation.
The Securities and Exchange Board of India (SEBI) restricted then-Essel Group chairperson Subhash Chandra and Punit Goenka from holding any director or key managerial position in any listed firm last year. The pair was accused of misusing their position as directors of a publicly traded company by siphoning off funds for their own gain. The comfirmatory order was issued by the SEBI in August 2023.
Two months later, the Securities Appellate Tribunal overturned the SEBI judgment and ordered Goenka to cooperate with the market regulator in its investigation of him.
According to Bloomberg, Sony intends to submit a termination suit before the January 20 extended deadline for concluding the agreement, claiming that some of the requirements have not been completed. Goenka has maintained his position and wishes to lead the amalgamated entity.
What happens if the deal falls through ?
If the sale falls through, Zee will be subject to possible defaults. The news comes as Mukesh Ambani is attempting to fuel Reliance Industries’ media ambitions by discussing a merger with Walt Disney Co. India.
The Sony-Zee merger aimed to create a $10 billion media juggernaut with the financial clout to compete with global behemoths Netflix Inc. and Amazon.com Inc., as well as domestic heavyweights like Reliance.