Puneet Goenka moves NCLAT to challenge admission of bankruptcy proceedings against Zee

Zee Enterprises' Managing Director and Chief Executive Puneet Goenka on Thursday moved appellate tribunal NCLAT challenging the order of the National Company Law Tribunal, which admitted an IndusInd Bank plea for insolvency proceedings against the firm.

The appeal seeking relief against the NCLT's Mumbai bench order was filed by Goenka in the National Company Law Appellate Tribunal (NCLAT) on Thursday, as per an official statement from the company.

"Goenka is taking all the necessary steps as per law to protect the interests of all stakeholders of Zee Entertainment Enterprises (ZEEL) and to achieve a timely completion of the proposed merger with Culver Max Entertainment," the statement said.

A division bench of judicial member H V Subba Rao and technical member Madhu Sinha on Wednesday admitted the plea by private sector lender IndusInd Bank and appointed Sanjeev Kumar Jalan as the resolution professional in the matter.

The matter pertains to a default of Rs 89 crore by Zee Group's multisystem operator arm Siti Networks claimed by IndusInd Bank, for which ZEEL was a guarantor.

The private sector lender has also filed a separate insolvency petition against Siti Networks at the NCLT. The NCLT has appointed Mohit Mehra as the resolution professional in this matter.

The development comes at a time when ZEEL is in the advanced stages of merging with Culver Max Entertainment (Sony) in one of the biggest deals in the media and entertainment sector.

According to experts, the development is bound to create hurdles in the deal, with some opining that the powers of a company board stand superseded with the admission of an insolvency plea.

As per the existing bankruptcy laws, ZEEL can settle the dues with the private sector lender, which can help avoid troubles for the merger.

The merger has already received multiple statutory clearances, but some of the lenders are insisting on clearing their dues before moving ahead.

A counsel for ZEEL requested for a two-week stay on the order, but the same was rejected by the NCLT.

A copy of the order is yet to be uploaded on the NCLT website.

As per reports, Siti, which owes over Rs 850 crore to various lenders, had taken a loan from IndusInd Bank where ZEEL was the loan guarantor under the Debt Service Reserve Account Guarantee Agreement.

Earlier, the bank had approached Delhi High Court and filed its plea in the NCLT in February this year.

"Goenka firmly believes in the potential of the merger to deliver immense value to all stakeholders. ZEEL is a debt-free and financially strong company, and believes in value creation for its stakeholders," the company statement said.

The ZEEL stock fell 3.35% to close at Rs 199 a piece on the BSE on Thursday.