NCLT Adjourns ZEE Lenders Matter Against Proposed Merger To 2 February

The tribunal, consisting of HV Subba Rao and Madhu Sinha, was hearing the petitions filed by the IndusInd Bank, Axis Finance Limited, IDBI Bank, and the Indian Performing Right Society (IPRS).

Arguing for ZEE, senior advocates Janak Dwarkadas and Navroz Seervai maintained that the applications filed to oppose the merger are tactics being used to delay the merger completion process.

They pointed out that the key regulatory and shareholder approvals have already been received; which is why these applications cannot prevent a merger from taking place. They said that the scheme has already received approval from 99.97% of shareholders and all secured creditors. Further, unsecured creditors who have debt with the conglomerate have not objected. Moreover, approvals from Sebi, Stock Exchanges, the CCI, regional director, and the official liquidator have also been received.

The counsels also said the scheme provides that the liabilities of ZEE will continue, and the merged entity will be liable for the disputed claim amount, the proposed merger isn’t fraudulent or malafide for the body of creditors, as stated in the applications.

The NCLT disposed off two of the applications as infructuous, while said a separate application raising objections filed by one of the parties was under scrutiny by the registry.

It also posted the matter for further hearing on 2 February.

Last year, IndusInd Bank had first approached the dedicated bankruptcy court against ZEE for an alleged default of ₹89 crore. Later, Axis Finance, a subsidiary of private sector lender Axis Bank, first moved the Bombay High Court against Essel Group promoter Subhash Chandra and his sons Punit and Amit Goenka, seeking recovery of ₹61.64 crore, and later filed an application in the NCLT.

Last month, another financial creditor, IDBI Bank filed an insolvency application claiming a default of ₹149 crore. The bank’s purported claim arises under a debt service reserve agreement entered into by the bank and the company for the financial facility availed by Siti Networks, an Essel group entity.

Earlier this month, IPRS also filed a petition at the tribunal under the Corporate Insolvency Resolution Process (CIRP), seeking payment of over ₹211.41 crore.