Merger at risk due to ongoing investigations: Zee tells Sebi

New Delhi: Zee Entertainment Enterprises has written to SEBI that "continuous and repetitive" investigations on the same cause of action creates prejudice for the Company and Shareholders, and can potentially impact the merger process.

SEBI has given a No Objection Certificate ('NOC') to the Composite Scheme of Merger in the matter of ZEEL and Sony Pictures Networks India Pvt. Ltd. ('Sony'), which is one of the largest integrations of industry majors in the media industry and entails an incoming foreign direct investment of $1.7 billion (approx.) into India.

In a letter to SEBI, Zee said, "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, "It may also be noted that the transactions in the present matter pertain to the year 2019 and a detailed explanation has already been provided to Stock Exchanges 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," the company said.

"It is submitted that 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.

"It is submitted that ZEEL 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 cause to the shareholders, thereby acting in the interest of the shareholders," the company said.