Sony Pictures Entertainment (SPE) is closely following the interim regulatory order issued by the Securities and Exchange Board (SEBI) against ZEE Entertainment directors Subhash Chandra and Punit Goenka. The company expressed its seriousness regarding the SEBI order and stated that it will continue to monitor any developments that could impact the merger deal with Zee Entertainment Enterprises Ltd.
Background of the SEBI Order and its Implications
SEBI recently imposed a ban on Subhash Chandra, the founder and Chairman Emeritus of ZEE, and Punit Goenka, the Managing Director, from holding key positions in listed companies. This action was taken due to allegations of insider trading. The SEBI order raised concerns about the potential consequences for the planned merger between Sony Pictures Networks India (SPNI) and ZEE.
Commitment to Monitoring the Merger Deal
Amid speculation about the future of the merger, Sony reasserted its commitment to the deal and emphasized its vigilance regarding the SEBI order. The company stated that it takes the interim order seriously and will continue to monitor any developments that could affect the merger.
Details of the Merger between Sony and Zee
The merger between SPNI and ZEEL was announced on December 21, 2021. Sony will acquire a majority stake of 50.86%, while Zee’s promoters will hold 3.99%, and the remaining stake will be owned by other shareholders of Zee. Punit Goenka, the current MD and CEO of ZEEL, will retain his position in the merged company. The combined entity will become India’s largest entertainment network, encompassing over 70 TV channels, two video streaming services (ZEE5 and Sony LIV), and two film studios (Zee Studios and Sony Pictures Films India).
Legal Actions and Shareholder Support
Subhash Chandra and Punit Goenka have appealed the SEBI decision at the Securities Appellate Tribunal. The regulatory action against them is related to allegations of fund misappropriation. The shareholders of ZEEL approved the merger in October of the previous year, following the conditional approval of the fair trade regulator Competition Commission of India.
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