Former CJI says Zee-Sony merger won't proceed without Punit Goenka: ET report

He asserts that Goenka's appointment forms an integral aspect of the deal approved by Zee's shareholders.

Uday Umesh Lalit, former Chief Justice of India (CJI) has provided legal counsel asserting that the Zee Entertainment and Sony Pictures merger cannot proceed without Punit Goenka leading the combined entity, as reported by The Economic Times.

Lalit highlights that the Securities Appellate Tribunal's (SAT) decision, which annulled a SEBI directive from August 2023, bolsters the necessity of Goenka heading the merged venture. This legal opinion, obtained and disclosed by a ZEEL shareholder, provides a new dimension into the two-year merger narrative.

"In my view, in the absence of appointment of ZEEL director as the managing director and/or chief executive officer of the transferee company, the scheme cannot be implemented without fresh approval of shareholders nor can the board of directors of the concerned companies amend or modify the integral part of the scheme", Lalit said in an opinion conveyed to a ZEEL shareholder.

He further added, “Since there is no embargo placed by any restraint order, there is nothing inhibiting Punit Goenka from being the managing director and chief executive officer of the amalgamated company. The logical corollary of the order is that the scheme contemplated can and must be given effect to."

As per the shareholders' approved scheme, the new company's board will consist of nine directors. Sony, holding 50.86% stake, will nominate five directors, while the remaining four will include three independent directors and the managing director from Zee Entertainment.

Additionally, it was agreed that Goenka would lead the new entity for five years before any reconsideration by the shareholders.

However, the Securities and Exchange Board of India (SEBI) banned Punit Goenka from holding managerial or directorial positions in ZEEL, prompting for a reconsideration in the leadership.