Zee-Sony Merger: NCLAT sets aside NCLT order, Zee share price jumps 6%
1 min read 26 May 2023, 01:05 PM ISTSetting aside the earlier NCLT order for ‘violation of principles of natural justice’, the appellate tribunal said that Zee should have been heard and has remitted the case back to NCLT.
PremiumIn a relief to Zee Entertainment Enterprises (ZEEL), the National Company Law Appellate Tribunal (NCLAT) on Friday set aside a NCLT order directing the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to review their initial approvals to the Zee-Sony merger.
Setting aside the earlier NCLT order for ‘violation of principles of natural justice’, the appellate tribunal said that Zee should have been heard and has remitted the case back to NCLT.
NCLAT held that Zee should have been heard by NCLT as per principles of “natural justice" before directing NSE and BSE to review their no objection certificate (NOC) given for the merger.
NCLT, on May 11, had instructed the NSE and the BSE to review their previous clearances for the merger between ZEE and Sony and requested the exchanges to reevaluate the non-compete clause of the merger.
ZEE contested the NCLT's order, asserting that it was not given a fair opportunity to present its case, questioning the tribunal's jurisdiction over matters such as non-compete fees.
Meanwhile, as per the proposed deal, Sony Pictures Entertainment would indirectly hold a 50.86% stake in the merged company, while Zee's founders will hold 3.99% stake. Other shareholders, including the public, will hold the remaining 45.15% shareholding.
ZEE share price spiked over 7% after the NCLAT order. At 1:35 pm, the shares of ZEE were trading 7.30% higher at ₹191.80 apiece on the BSE.
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