The Indian Performing Right Society (IPRS) has filed a petition against Zee Entertainment Enterprises Limited (ZEEL) in the National Company Law Tribunal (NCLT) claiming default of `211.4 crore in music royalty payments. IPRS, which protects the interests of music artistes, has urged the bankruptcy court to initiate a corporate insolvency resolution process (CIRP) against ZEEL. It has claimed that the media conglomerate has defaulted on royalty payable for utilisation of “literary and musical works.
In a regulatory filing, the media conglomerate said it will file a reply rejecting the IPRS claim on the ground that there is a pre-existing dispute between the parties on the claimed amount. “The claim is not in consonance with the interpretation of the law on the point of payment of royalties for ‘literary and musical works’ by the Delhi High Court, and hence, the claimed amount is not due or payable to IPRS,”it added.
Last month, the Mumbai bench of the NCLT granted IndusInd Bank, Axis Finance Ltd (AFL) and IDBI Bank permission to file applications to intervene in the proposed merger scheme between ZEEL, Culver Max Entertainment (Sony) and Bangla Entertainment.
The lenders have intervened to prevent the merger to reclaim pending dues from ZEEL promoters. The NCLT will begin the final hearing in the matter on January 12. The tribunal had also instructed the Registrar of Companies (RoC) and the regional director of the ministry of corporate affairs to submit a report before the scheduled hearing on January 12.
ET previously reported that AFL, the non-banking financial arm of Axis Bank, had requested the NCLT-appointed Resolution Professional Raj Kamal Saraogi to intervene and take preventive steps to stop the amalgamation scheme between the three companies. Last year, on December 22, ZEE and SPN signed a definitive agreement to merge the two companies. The proposed plan will see ZEE merging into SPN and, after closing, the merged company will be publicly listed in India.
As per the agreement, ZEE MD & CEO Punit Goenka will lead the merged company as its MD and CEO. The board will have nine directors, of whom the Sony Group will nominate five, while three will be independent.
The company has already received approval from stock exchanges, the anti-monopoly regulator the Competition Commission of India (CCI) and its shareholders.
Under the terms of the arrangement, Sony will hold a 50.86 % stake in the merged entity. The promoters of Zee will hold 3.99% and other Zee shareholders will hold a 45.15% stake in the combined company.
Source: Economic Times