Sony Pictures Networks India has not yet agreed to a deadline extension as requested by Zee on December 17 for the completion of the merger of the two media houses. Sony said, the request for extension itself was an acknowledgement that they would not be able to close the merger of the two companies by the December 21 deadline.
The Sony-Zee merger deal, which would create a $10-billion media and entertainment company, was inked on December 21, 2021. It has been facing a number of hurdles, mainly because of the legal cases against Zee and its promoters, Subhash Chandra and Punit Goenka. The agreement allows Zee and Sony to extend the deadline thrice. But if Sony decides against it, it will have to pay a termination fee of $100 million to Zee.
Although the proposed merger has received regulatory and shareholder nods, it still needs the approvals of the ministry of information and broadcasting and the registrar of companies. For the I & B ministry clearance, Sony needs to submit the names of the directors who will be on the board of the merged entity. With Zee managing director Punit Goenka facing a regulatory probe by SEBI for siphoning off funds from Zee, it is not able to submit the list.
The merger agreement allows Sony to nominate the majority of the board members of the combined entity while Zee has the right to appoint Punit Goenka as managing director of the same. Thanks to the legal troubles, Sony has been pitching its India head, N.P. Singh, as managing director of the new entity. However, Punit has not accepted this suggestion.