Zee Entertainment to take legal action against Sony; denies all allegations

The ZEE Entertainment Enterprises Limited board took on record communications received from Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India) and Bangla Entertainment Private Limited, “purporting to terminate the Merger Co-operation Agreement and seeking a termination fee of $90 million on account of alleged breaches by ZEEL of the terms of MCA, invoking arbitration and seeking interim reliefs against ZEEL.”

The ZEE Entertainment Enterprises Limited (ZEEL) board which meet in Mumbai on January 22 took on record communications received from Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India) (Culver Max) and Bangla Entertainment Private Limited (BEPL), “purporting to terminate the Merger Co-operation Agreement (MCA) dated 21st December 2021 and seeking a termination fee of $90 million on account of alleged breaches by ZEEL of the terms of MCA, invoking arbitration and seeking interim reliefs against ZEEL.”

However, the company has denied the allegations and has refused to pay any termination fee. “ZEEL categorically denies all the assertions raised by Culver Max and BEPL on the alleged breaches under the terms of the MCA, including their claims for the termination fee,” the company said in a filing with stock exchanges. 

“The Board of Directors [at their meeting held on Monday] noted that all efforts and steps were taken by ZEEL in line with the Merger Co-operation 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,” the company said. 

“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 said. 

ZEEL said its 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,” the company said.

ZEEL said it 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.

“Under the MCA, ZEEL exercised its right to require Culver Max and BEPL to enter into good faith negotiations for a period of 30 days to arrive at a mutual agreement on the extension of the end date by a reasonable period of time for completion of the transaction as per the terms of the MCA,” the company said.