Mumbai: The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal filed by IDBI Bank against Zee Entertainment Enterprises Ltd (ZEEL), while permitting the lender to file a fresh plea regarding alleged financial dues.
In a regulatory filing, Zee informed the exchanges that the appeal by IDBI Bank, challenging a previous order passed by the National Company Law Tribunal (NCLT) on May 19, 2023, has been rejected. The NCLAT upheld the NCLT’s ruling, which had favored Zee in the dispute.
The appellate tribunal observed that Zee should have been granted a hearing by the NCLT before it issued directions to both stock exchanges to reassess the No-Objection Certificate (NOC) for the now-defunct Zee-Sony merger. IDBI Bank was among several creditors — including Axis Finance and IndusInd Bank — that had challenged the merger before the NCLT.
The matter stems from a December 2022 insolvency petition filed by IDBI Bank under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Zee. The bank alleged that the media company had defaulted on financial obligations tied to a Debt Service Reserve Agreement (DSRA), executed in connection with credit facilities extended to Essel Group’s Siti Networks.
Despite the dismissal of its appeal, IDBI Bank has been granted the opportunity to file a fresh petition against Zee, as per the NCLAT’s latest directions.
The legal dispute also played a role in the termination of the highly anticipated Zee-Sony merger in January 2024, which was called off citing “non-compliance with the terms of agreement.”
