Big relief for Zee: NCLAT stays insolvency proceedings against media firm

Hailing the NCLAT order, Goenka said, “Remain committed towards protecting the interest of all stakeholders. Our focus continues to be on the timely completion of the proposed merger.”

The tribunal has issued a notice to private sector lender IndusInd Bank on the plea filed by by Goenka. NCLAT will next hear the issue on 27 March.

Catch all the latest updates here:

– Senior Advocate Mukul Rohatgi, appearing for Goenka, argued for the company before NCLAT.

– Recovery of the loan must go through the Debts Recovery Tribunal and not through Insolvency Code, Rohatgi says

– Zee had given a special guarantee not for Siti’s debt, but only to maintain shortfall in only one tranche of interest repayment account,’ Goenka told NCLAT

– No arguments were heard by National Company Law Tribunal (NCLT) on initiation of insolvency proceedings against Zee, Goenka tells NCLAT.

– Entire amount of Siti’s debt is not recoverable from Zee, Goenka to NCLAT

– Demand on Zee Entertainment Enterprises can only be raised if Siti fails to keep one tranche of interest repayment, says Punit Goenka to NCLAT

– Demand of ₹83 crore is the principal amount loaned to Siti, Zee never issued a guarantee for the loan, Goenka says

– Meanwhile, IndusInd Bank told NCLAT that Zee had argued in NCLT against initiation of insolvency proceedings

– The Delhi Hgh Court held that Zee will cover every default committee by Siti, guarantee shall remain operative and binding on Zee, the lender informed NCLAT

– Zee knew that insolvency proceedings were pending in NCLT and took a chance by not responding to the insolvency proceedings,’ says IndusInd Bank to NCLAT

Earlier on Thursday, Goenka challenged insolvency proceedings against the company by the bankruptcy court over a loan default from IndusInd Bank Ltd, and still expected a timely completion of a merger with the local unit of Japan’s Sony Group Corp.

The NCLT has admitted the plea at a time when ZEEL is in advanced stages of merging with Sony in one of the biggest deals in the media and entertainment sector.

The matter pertains to a default of ₹89 crore by Zee Group’s multisystem operator arm Siti Networks claimed by private sector lender IndusInd Bank, for which ZEEL was a guarantor.

The IndusInd Bank has also filed a separate insolvency petition against Siti Networks at the NCLT. The NCLT has appointed Mohit Mehra as the resolution professional in this matter.

Shares of Zee Entertainment Enterprises continues to extend their decline today after insolvency proceedings were initiated against the company due to a loan default.

The stock tumbled around 5.4% in Friday’s early trade after closing down nearly 4% in the previous session.

The company’s shares, which have lost about 20% so far this year, are on track for their fifth straight session of losses.

Meanwhile, the National Stock Exchange on Thursday banned the derivatives trading on Zee’s stock effective from 28 April.