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NCLAT reverses the NCLT's merger order for Zed and Sony

The NCLT's directive to the bourses NSE and BSE to rethink its approval of the Zee-Sony merger has been overturned by the National Company Law Appellate Tribunal (NCLAT).

After hearing from all sides, a two-member NCLAT bench has requested that NCLT reexamine the merger of Zed Entertainment with Culver Max Entertainment (formerly known as Sony Pictures Networks India).

The National Company Law Tribunal's (NCLT) Mumbai bench issued a ruling on May 11, 2023, which Zed Entertainment Enterprises Limited (ZEEL) appealed. The appellate tribunal then heard the case and issued its decision.

The merger of ZEEL and Culver Max Entertainment had already received clearance from NSE and BSE, but the NCLT had ordered them to reconsider. Additionally, it had requested that the bourses review the non-compete fee in accordance with the merger condition.

The aforementioned ruling was contested by ZEEL before the appeal tribunal on the grounds that the NCLT had not given it enough time to submit its case and that natural justice had not been followed.

It also argued that non-compete disputes are beyond the NCLT's purview.

According to the terms of the agreement, Sony will indirectly own 50.86% of the merged business. About 4% will be owned by Zee's founder, with the other shares being held by the company's other owners.

Additionally, Sony Group will pay the proprietors of the Essel Group a Rs 1,100 crore non-compete fee.

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