Punit Goenka, the CEO of Zee Entertainment Ltd (ZEEL), shared an update today regarding a detrimental turn of events within his company. He announced that Sony Group Corp from Japan has issued a notice terminating the merger with ZEEL. Additionally, they are seeking $90 million, citing alleged breaches of the merger cooperation agreement by Mr. Goenka's company.
This update came to light while Punit attended the Ram Temple consecration ceremony in Uttar Pradesh’s Ayodhya. The CEO, present for the Pran Prathistha ceremony amongst other high-profile guests, interpreted these developments in his company as "a sign from the Lord."
He took to X, previously known as Twitter, to share this update, mentioning that he learned about the news upon arriving at Ayodhya early in the morning for the auspicious Pran Pratishtha ceremony. Despite dedicating two years to envisioning and working on the deal, he expressed regret that it had fallen through, despite the company's utmost sincerity and efforts.
In his social media post, the Zee CEO conveyed that he saw it as a divine sign. He affirmed his resolution to move ahead positively and strive towards strengthening Bharat’s pioneering M&E Company for the well-being of all its stakeholders.
On Monday, the Japanese entertainment powerhouse Sony officially informed Zee about its intention to abandon the merger with its India unit and the media conglomerate. The resolution comes after a deadlock between the two companies regarding the leadership of the merged entity, especially amidst an investigation into its conduct by the Securities Exchange Board of India involving Goenkar.
Reportedly, Zee has indicated its intention to take legal measures against Sony for its choice to terminate the merger. ZEEL asserts that it vehemently denies all the allegations made by Culver Max and BEPL regarding the supposed breaches under the terms of the MCA, including their demands for the termination fee.
In its communication on the stock exchanges, Zee Entertainment reported that Punit Goenka, the Managing Director and CEO of the merged entity, was open to stepping down in the interest of the merger. Discussions involved proposals such as appointing a director to the merged company's board, ensuring protection for ongoing investigations and legal proceedings, and addressing the best interests of Zee’s directors and stakeholders, with subsequent updates to be incorporated into the scheme.
Zee also explored the possibility of a six-month extension with Sony to finalize the merger, but Sony turned down all the suggested plans.