NCLAT set to hear arguments against the Zee-Sony merger on May 17: Report

NCLAT dismissed creditors' argument that the appellate tribunal should await Zee's plea in the NCLT to enforce the merger.

According to a report on Moneycontrol, on April 15, the National Company Law Appellate Tribunal (NCLAT) rejected the arguments of creditors IDBI Bank and Axis Finance, stating that the matter should be heard after the NCLT's ruling. Instead, the NCLAT agreed to consider a challenge to the Zee-Sony merger from May 17.

The appellate tribunal was advised by IDBI Bank and Axis Finance to postpone enforcing the merger until Zee's appeal at the National Company Law Tribunal (NCLT) was resolved.

The $10 billion media behemoth that would have been formed in the nation had Sony called off the merger on January 22. Zee's inability to fulfill some financial obligations under the agreement and devise a strategy to rectify them contributed to the decision.

Zee refuted the claims and charged the Japanese business of acting in "bad faith" when it decided to scrap the transaction. The Mumbai NCLT court is currently considering a plea from Sony requesting that the merger be enforced, and it is scheduled to be heard on April 25. IDBI Bank's (ASG), N Venkatraman, stated that the case will be affected by Zee's NCLT plea since it would determine the merger's destiny.

Senior counsel Arun Kathpalia, representing Zee, stated that the NCLAT case pertained to an appeal against the approval of the Zee-Sony merger, whilst the NCLT case addressed the merger's execution. NCLAT denied a stay of the Zee-Sony merger on December 15.

The NCLAT stated that although the merger is subject to court orders, they cannot remain the same until the case is heard on its merits. But since the deal was canceled, not much has changed.