Sony-Zee deal: Monitoring Sebi’s moves on Zee's Chandra, Goenka, says Sony
This was Sony’s first statement after reports claimed that Sony would stick to the deal despite an interim order by the Sebi.
- Jun 21, 2023,
- Updated Jun 21, 2023 1:52 PM IST
Tokyo-headquatered Sony Pictures Entertainment on Wednesday said that it takes the interim order of Securities and Exchange Board of India (Sebi) against Zee Entertainment's Chairman Emeritus Subhash Chandra and Managing Director and CEO Punit Goenka “very seriously”. The company said it will continue to monitor developments that will affect their merger deal, a report in Reuters said.
This was Sony’s first statement after reports claimed that Sony would stick to the deal despite an interim order by the Sebi. Last week, the market regulator banned Zee Group Chairman Subhash Chandra and CEO Punit Goenka for a year, stating that they were actively involved in diverting company funds to the group’s related entities.
"There have been several erroneous press reports recently speculating about the future of ZEEL’s planned merger with SPNI 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," SPE said in a statement.
Zee and Sony Pictures Networks India Pvt Ltd (Sony) are in the process of merging their television channels, film assets and streaming platforms. A No Objection Certificate (NOC) has been obtained from Sebi in this regard.
On Tuesday, Zee wrote to the markets regulator saying its 'continuous and repetitive' investigations on the same cause can potentially impact its merger with Sony.
"Please note that the said merger is at an advanced stage post receipt approvals from various regulators (including SEBI, Stock Exchanges and CCI etc.) and the scheme is also approved by 99.9 per cent of the equity shareholders of ZEEL," Zee said in a letter to Sebi.
The company has said that the transactions in the present matter pertain to the year 2019 and a detailed explanation has already been provided to bourses and Sebi. "It is beyond our comprehension as to why the present matter is being re-investigating/re-examining, when the cause of action pertaining to the matter is around 4 years old," Zee stated.
"We were never privy to the loan arrangements between Borrower Entities and Yes Bank or the loan amount involved. There was no privity of contract between the Yes Bank, ZEEL, and the Borrowing entities. The misappropriation of ZEEL's FD was the result of the unilateral action of YBL without any action on part of the ZEEL," Zee said, adding that the company happens to itself be a victim of the misappropriation by Yes Bank.
"Therefore, pursuant to the misappropriation, ZEEL has taken every step to ensure that money is recovered and no loss is caused to the shareholders, thereby acting in the interest of the shareholders," the company said in its statement on Tuesday.
Zee at SAT
On Tuesday, ZEEL told the Securities Appellate Tribunal (SAT) that the market regulator had reached a conclusion without giving him an opportunity for a hearing. Legal representatives of ZEEL said the Sebi's interim order is “unwarranted and unjustified”.
In its reply, Sebi told SAT that the urgent action was taken against the promoters in the alleged fund diversion case to safeguard the management, investors, and other stakeholders.
In its affidavit, Sebi said that the applications made by Chandra and Goenka on July 6, 2022, that there was no urgency and that the same issue is the subject matter of the show cause notice dated July 6, 2022, is completely "false and misleading".
It further stated that not only have there been violations but also the issuance of multiple false disclosures and submission of statements to cover up such wrongdoings.
"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," Sebi said affidavit to SAT.
The SAT will hear ZEEL's appeal against Sebi’s interim order on June 26.
Tokyo-headquatered Sony Pictures Entertainment on Wednesday said that it takes the interim order of Securities and Exchange Board of India (Sebi) against Zee Entertainment's Chairman Emeritus Subhash Chandra and Managing Director and CEO Punit Goenka “very seriously”. The company said it will continue to monitor developments that will affect their merger deal, a report in Reuters said.
This was Sony’s first statement after reports claimed that Sony would stick to the deal despite an interim order by the Sebi. Last week, the market regulator banned Zee Group Chairman Subhash Chandra and CEO Punit Goenka for a year, stating that they were actively involved in diverting company funds to the group’s related entities.
"There have been several erroneous press reports recently speculating about the future of ZEEL’s planned merger with SPNI 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," SPE said in a statement.
Zee and Sony Pictures Networks India Pvt Ltd (Sony) are in the process of merging their television channels, film assets and streaming platforms. A No Objection Certificate (NOC) has been obtained from Sebi in this regard.
On Tuesday, Zee wrote to the markets regulator saying its 'continuous and repetitive' investigations on the same cause can potentially impact its merger with Sony.
"Please note that the said merger is at an advanced stage post receipt approvals from various regulators (including SEBI, Stock Exchanges and CCI etc.) and the scheme is also approved by 99.9 per cent of the equity shareholders of ZEEL," Zee said in a letter to Sebi.
The company has said that the transactions in the present matter pertain to the year 2019 and a detailed explanation has already been provided to bourses and Sebi. "It is beyond our comprehension as to why the present matter is being re-investigating/re-examining, when the cause of action pertaining to the matter is around 4 years old," Zee stated.
"We were never privy to the loan arrangements between Borrower Entities and Yes Bank or the loan amount involved. There was no privity of contract between the Yes Bank, ZEEL, and the Borrowing entities. The misappropriation of ZEEL's FD was the result of the unilateral action of YBL without any action on part of the ZEEL," Zee said, adding that the company happens to itself be a victim of the misappropriation by Yes Bank.
"Therefore, pursuant to the misappropriation, ZEEL has taken every step to ensure that money is recovered and no loss is caused to the shareholders, thereby acting in the interest of the shareholders," the company said in its statement on Tuesday.
Zee at SAT
On Tuesday, ZEEL told the Securities Appellate Tribunal (SAT) that the market regulator had reached a conclusion without giving him an opportunity for a hearing. Legal representatives of ZEEL said the Sebi's interim order is “unwarranted and unjustified”.
In its reply, Sebi told SAT that the urgent action was taken against the promoters in the alleged fund diversion case to safeguard the management, investors, and other stakeholders.
In its affidavit, Sebi said that the applications made by Chandra and Goenka on July 6, 2022, that there was no urgency and that the same issue is the subject matter of the show cause notice dated July 6, 2022, is completely "false and misleading".
It further stated that not only have there been violations but also the issuance of multiple false disclosures and submission of statements to cover up such wrongdoings.
"In the instant case, we have a situation before us where the Chairman Emeritus and the Managing Director and CEO of this large listed company are involved in a myriad of different schemes and transactions through which vast amounts of public money belonging to listed companies are diverted to private entities owned and controlled by these persons," Sebi said affidavit to SAT.
The SAT will hear ZEEL's appeal against Sebi’s interim order on June 26.