IndusInd Initiates Insolvency Process Against Zee Entertainment Over Rs 83 crore Default

IndusInd Bank has moved the devoted chapter court docket towards Zee Entertainment Enterprises looking for cost of over Rs 89 crore in defaults. On Friday, the corporate knowledgeable the inventory alternate in a late night inventory alternate submitting that the personal sector lender has approached the Mumbai bench of the National Company Law Tribunal (NCLT) underneath the Corporate Insolvency Resolution Process (CIRP). “An application has been filed against the Company, under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, by IndusInd Bank Limited, claiming to be a Financial Creditor , before the Hon’ble Nation l Company Law Tribunal, Mumbai Bench for initiation of Corporate Insolvency Resolution Process against the Company, claiming a default of Rs.83,08,00,000,” Zee said in a BSE filing.

The development comes at a time when the Mumbai-based entertainment company has already entered into a definitive agreement with Sony Pictures Network India (SPN) for a merger. The board of directors of Zee Entertainment Enterprises Ltd (ZEEL) on December 22 last year had approved the merger with SPNI. Sony will hold 50.86 per cent stake in the merged entity, the Board had said. Further, it is also embroiled in a legal tussle with its largest shareholder, Invesco, at multiple judicial forums.

Zee said that it is a party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) entered into with lnduslnd Bank Limited for the term loan facility advanced to Siti Networks Limited.

“The issue of the company’s alleged default under the DSRA Guarantee Agreement, is sub-judice before the Hon’ble Delhi High Court in Suite No. (CS (Comm) 500/2020) filed by the company against lnduslnd Bank,” it added.

Zee claimed that the case is sub-judice before the Delhi High Court and the filing of the corporate insolvency resolution process (CIRP) application against the company is in breach of an order passed in the company’s appeal on December 3, 2021. take appropriate legal steps in this regard, it added.

“Filing of the said CIRP application is in breach of the order dated February 25, 2021 as modified by the order of December 3, 2021 passed in the Company’s Appeal No. (FAO(OS)(Comm) 15/2021) in the said suit. The company will therefore be adopting appropriate legal steps in that regard,” Zee Entertainment stated within the submitting.

Last month Axis Bank’s subsidiary Axis Finance had threatened authorized motion towards Subhash Chandra and Punit Goenka, managing director and chief govt officer, Zee Entertainment together with opposing merger between Zee and Sony Pictures Network India (SPNI). In a letter to Zee, Axis Finance stated that Chandra owes it excellent dues price Rs 146 crore.

At that point, ZEE maintained that neither the corporate nor its MD and CEO, Punit Goenka, had been celebration to any of the mortgage paperwork. The firm additionally identified that Goenka or the corporate didn’t present any assurance to Axis Finance for compensation.

The shareholders are looking for elimination of Punit Goenka and appointment of six new unbiased administrators. The Zee-Invesco matter is at present being argued on the National Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT) and Bombay High Court.

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