Sony Group announced on Monday that the merger announced by the two companies will close in 2021. Also, the company has demanded around Rs 748 crore from Zee as cancellation fee for the merger agreement.
Zee Entertainment has alleged that the Sony Group is violating the terms of the contract and even changing the amount it charges if it withdraws from the contract. In a stock exchange filing, Zee Entertainment stated that the company strongly denies all claims made by Sony that Zee has breached the contract.
Based on the guidance received from the board members of the company, appropriate legal action will be taken. The company also stated that it will take all necessary steps to protect the long-term interests of the shareholders.
This is how the dispute started
Recently there were reports of Sony pulling out of the Sea Entertainment merger. But the company announced that the merger would be completed. Zee explained that he will ask Sony Group to extend the contract period signed last year by one month. It was estimated that once the merger is completed, it will become the largest company in the country’s entertainment industry. But Sony was adamant.
After the merger is complete, disputes over which company head will take over the leadership position when the new company is formed are the reasons why the merger is abandoned halfway through. While the company argued for the leadership of Zee Entertainment chief Puneet Goenka, Sony demanded that Sony India head NP Singh be made the head. The reason is the case and legal proceedings against Puneet Goenka. Puneet Goenka has been temporarily barred by SEBI from being the head of listed firms on the complaint that he diverted money from the company. But later the Securities Appellate Tribunal quashed the order but Sony stood still.