ZEE refutes breach of MCA allegations by Sony; says will take legal action
ZEE has said it will take appropriate legal action against Sony, which has invoked arbitration proceedings against the former
Soon after Sony confirmed that it had called off the $10 billion merger with Zee Entertainment Enterprises Ltd (ZEEL), the latter has come out with a statement refuting all “claims and assertions” made by Sony (now Culver Max) regarding alleged breaches by ZEEL.
It said that it will take appropriate legal action against Sony, which has invoked arbitration proceedings against ZEEL and sought termination fee of USD 90 million
“The company categorically refutes all claims and assertions made by Culver Max and BEPL regarding alleged breaches of the MCA by ZEEL, including their claims for the termination fee, and reserves all its rights in this matter. The Company is evaluating all available options, and basis the guidance received from the Board, will take all necessary steps to safeguard the long-term interests of its stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings."
According to Zee’s disclosure to BSE, Culver Max and BEPL terminated the agreement and sought termination fee of USD 90 million on account of alleged breach of terms by ZEEL and has invoked arbitration against it seeking emergency interim reliefs against the Company.
“Pursuant to Regulation 30 read with Schedule III of the SEBI Listing Regulations, we wish to inform you that the Board of Directors of the Company at its meeting held today i.e. January 22, 2024 took note of communications dated January 22, 2024, received from Culver Max and BEPL purporting to terminate the MCA and seeking termination fee of USD 90,000,000 on account of alleged breaches by ZEEL of the terms of the MCA, and (b) invoking arbitration against the Company and seeking emergency interim reliefs against the Company,” ZEEL said.
In a press note about its board meeting held on Monday, ZEEL clarified that, “The Board of Directors noted that all efforts and steps were taken by ZEEL in line with the Merger Cooperation Agreement, approved by its shareholders and all regulatory authorities. ZEEL has consistently worked towards the implementation of the mentioned scheme in the interest of the shareholders. ZEEL also held several deliberations and good faith negotiations with Culver Max and BEPL, with a view to consider an extension of the merger completion timeline, that did not materialise.”
It also said that ZEEL’s Board of Directors is evaluating all the available options.
“Basis the guidance received from the Board, ZEEL will take all the necessary steps to protect the long-term interests of all its stakeholders, including by taking appropriate legal action and contesting Culver Max and BEPL’s claims in the arbitration proceedings,” it said.
ZEEL inked the Merger Co-operation Agreement with Culver Max and BEPL on 21st December 2021, in relation to the Composite Scheme of Arrangement, which was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) on 10 and 11 August 2023, respectively.
(Compiled by Sonam Saini and Aditi Gupta)
