In a twist that could reshape the landscape of Indian television, the much-anticipated union between Zee Entertainment and Sony Pictures Networks is hitting a snag. The crux of the issue? Leadership. Sony’s eleventh-hour pivot insists on appointing its own executive as the chief, sidelining Zee’s Punit Goenka, the initially agreed-upon head honcho for the merged entity.

What Happened? This corporate drama unfolds against a backdrop of legal tangles, with Zee’s Goenka embroiled in financial scrutiny by the Securities and Exchange Board of India (Sebi). Despite a court giving Goenka the green light to continue in leadership roles, Sony’s playing it cautious, preferring its own N.P. Singh to steer the ship post-merger.

The stakes are high, with the merger poised to be the biggest in India’s entertainment sector. Sony would take the reins with a majority stake, while the Goenka family’s hold would shrink to a mere 3.99%, leaving the rest to public shareholders.

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What now? As the December deadline looms, talks have ground to a halt. Zee’s Goenka, in a recent earnings call, reiterated his commitment to the merger’s success, hinting at ongoing negotiations with Sony to iron out the creases.

A temporary fix could be an interim managing director until the dust settles around Goenka’s legal woes. But any deviation from the original merger blueprint would need a nod from the National Company Law Tribunal (NCLT), adding another layer of complexity.

Price Action: Zee Entertainment Enterprises Limited shares were down 1.1% at ₹259.95 on Friday shortly after market open.

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