Amidst the ongoing ZEE-Sony dispute, Subhash Chandra has leveled allegations against Sony for impeding the merger, despite Punit Goenka's proposed resignation from the chief executive position
In the latest ZEE-Sony saga, Subhash Chandra, the chairman emeritus of Zee, has accused Sony of deliberately obstructing the mega-merger despite Zee promoters' willingness to have Punit Goenka step down from the chief executive position. As per a report by the Economic Times, Chandra stated that Zee plans to file a lawsuit against the Japanese company seeking compensation for damages.
The Zee founder also mentioned, in an interview with ET, that the promoter family intends to increase its stake in the company by 5 per cent shortly, ultimately reaching a total of 26 per cent.
During mid-December, Chandra stated that the decision concerning Punit Goenka's position was conveyed to Sony but was not accepted. He said that Sony's strategy appeared to involve engagement followed by withdrawal, potentially depicting Zee as vulnerable. Despite extending the deal, Sony is now alleging that Zee failed to fulfill merger conditions. However, Chandra indicated that arbitration and NCLT proceedings will demonstrate that Zee satisfied the majority of conditions.
Zee witnessed a significant 33 per cent drop in share price on January 23, resulting in a market capitalization decline to Rs 15,680 crore and substantial losses for retail investors. Despite the distress, Zee's leadership remains optimistic. They recounted a meeting held on January 26, 2019, where 38 lenders granted time for repayment.
"On January 26, 2019, I gathered 38 lenders in our boardroom and assured them that I would repay them, asking only for some time. They granted me that time. Today, I'm conveying a similar message to our minority shareholders: Have patience for three to four quarters with Punit and the board, and you will see the results. The company will rebound to the levels it once achieved," Chandra stated in the report.
He stressed that Zee hit an EBITDA peak of Rs 2,400 crore and will return to that level. With the company's organisational complexity in mind, he affirmed Punit's leadership as optimal.
Last week, Sony and its subsidiary Bangla Entertainment Pvt. Ltd. (BEPL) ended their $10 billion merger deal with Zee Entertainment Enterprises Ltd. (ZEEL), blaming the company for not meeting merger conditions.