Subhash Chandra, founder and promoter of the Zee Entertainment Enterprises Ltd., wrote to Finance Minister Nirmala Sitharaman accusing the market regulator of trying to scuttle the conglomerate's merger with Japan's Sony Group.
In a Jan. 16 letter, a week before Sony called off its merger plans with Zee, Chandra said the Securities and Exchange Board of India has been acting with a "predetermined mind" and sought the minister's intervention to safeguard the interest of minority shareholders. NDTV Profit has reviewed the letter.
Sony Pictures Networks India Pvt., now called Culver Max Entertainment Ltd., a wholly owned subsidiary of Sony Group Corp., on Jan. 22 issued a notice terminating the definitive merger agreements entered with Zee, according to its statement. The merger did not close by the end date as, among other things, the closing conditions were not satisfied by then, the statement said.
“I am not suggesting that SEBI should not investigate, if they have doubts of any kind,” Chandra wrote in the letter. “My concern is the timing of this new notice, and the urgency of the same since it matches with the merger timeline of Zee and Culver Max.”
Chandra alleged in the letter that the notice to former directors being issued at this stage appears to be an "exercise to sensationalise the matter through media platforms". He said he had expressed similar concerns in a letter written to the market regulator in November 2018, over "negative forces impacting the valuation of Zee".
Shares of Zee plunged by a record after the cancellation of a planned $10-billion merger with Sony sparked a flurry of downgrades, with analysts predicting a sharp contraction in the Indian company's valuation.
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