Sony Pictures has affirmed its serious concern about the Securities and Exchange Board of India (SEBI)’s interim order against Subhash Chandra, Chairman Emeritus of Zee Entertainment, and Punit Goenka, its CEO. The media giant assured it will remain vigilant about developments impacting the merger deal with Zee.

What Happened? This statement follows recent media reports speculating on the merger’s future after SEBI’s interim order. Sony and Zee had planned to consolidate their television channels, film assets, and streaming platforms in late 2021, but the deal’s execution faced delays. Challenges include a legal dispute with lenders about Zee group’s alleged loan defaults and reconsideration of merger approvals by stock exchanges.

On Friday, the Securities Appellate Tribunal (SAT) declined to provide interim relief to Essel Group Chairman Subhash Chandra and Punit Goenka, following SEBI’s action against them. Zee Entertainment Enterprises challenged the SEBI order at SAT, contending there was no evidence beyond bank statements to support the allegations of funds round-tripping.

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Meanwhile, the hearing of the National Company Law Tribunal (NCLT) on the potential ZEEL-Sony merger is scheduled for June 26.

SEBI’s interim order has introduced risks to the Sony-Zee merger, according to a Bank of America (BofA) report. The future of the merger and Goenka’s potential role as CEO of the merged entity remains unclear. The Competition Commission of India (CCI) had approved the ZEE-Sony merger in October 2022.

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