Zee drops after seeking merger deadline extension from Sony’s India unit

Zee drops after seeking merger deadline extension from Sony’s India unit

Shares of India’s Zee Entertainment Enterprises sought further extension for a merger deadline from the Indian arm of Japan’s Sony Group (6758.T).

The merger to create a $10 billion media and entertainment powerhouse, which was announced in 2021, won a key regulatory approval in August.

However, the merger has been delayed mainly after India’s markets regulator opened its investigation on Zee CEO Punit Goenka and a clash between the two companies over whose top executive would run the merged entity. Sony is pushing for its Indian operations managing director N.P. Singh to head the merged company, as Goenka is under investigation, the Mint business newspaper reported in last November.

The Securities and Exchange Board of India (SEBI) had in August alleged that Goenka and Zee Group Chairman Subhash Chandra were actively involved in diverting company funds. They have both denied any wrongdoing.

An Indian tribunal lifted a ban in last October on Goenka holding board positions in Zee Group companies, but said he would have to cooperate with any investigation by India’s markets watchdog.

Although, the outcome of SEBI investigation could take 8-12 months, until which Sony may not wait and will propose to appoint a new CEO, said Taurani, adding that the negotiations between both parties could be resolved over the next 3-4 weeks.