The Bombay High Court on Wednesday directed Axis Finance Ltd. to approach the appropriate forum to raise its concerns over the merger between Zee Entertainment Enterprises Ltd. and Sony Pictures Networks India Pvt.
Axis Finance is free to raise its concerns before the National Company Law Tribunal, which is set to hear the matter on Nov. 3, the high court said.
Axis Finance, a subsidiary of Axis Bank Ltd., had approached the court earlier this year for securing a debt of nearly Rs 150 crore owed by Essel Group companies—Primat Infrapower, Multiventures Pvt. and Cyquator Media Services Pvt.
The two entities were extended a term loan at the request of Subhash Chandra and his son Punit Goenka, Axis Finance has claimed.
Both Chandra and Goenka had assured repayment by way of guarantees, the NBFC had told the court.
It approached the high court to expedite the proceedings at NCLT, the NBFC's counsel said during the hearings.
At NCLT, Axis Finance has filed an application to request the tribunal to recall its August order last year, which dispensed the requirement to conduct a meeting of unsecured creditors for approval of the merger.
The Companies Act, 2013, and the rules require companies to convene a meeting of the unsecured creditors for the approval of such schemes, it had argued.
To be clear, the NCLT has discretion to dispense with this requirement, which it exercised by directing Zee Entertainment to inform unsecured creditors about the merger via post.
On its part, Zee has maintained that Axis Finance's claims are "meritless" and "unjustified". And that it's not applicable for group companies.
Recently, the Competition Commission of India had granted approval to the Zee-Sony merger, subject to certain modifications. Specifically, the transaction involves amalgamation of Zee Entertainment Enterprises Ltd. and Sony Group's Bangla Entertainment Pvt. with Culver Max Entertainment Pvt.—an indirect wholly owned subsidiary of Sony Group Corp.
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