Zee Entertainment's Founder Alleges Sony's 'Criminal Design' In Merger Fallout

Subhash Chandra, chairman emeritus of Zee Entertainment Enterprises, has accused Sony of deliberately sabotaging a merger despite Zee’s willingness to replace CEO Punit Goenka.

What Happened? In an interview with ET, Chandra revealed plans to sue Sony for damages, alleging a strategic ploy to portray Zee as vulnerable. He also shared that the Zee promoter family aims to increase its stake in the company by 5%, targeting a total of 26%.

Chandra believes that Sony’s refusal to proceed with the merger, even after Goenka’s proposed step-down, was part of a calculated strategy. He intends to present this viewpoint to the Zee board. Despite Sony extending the deal by a month, Chandra asserts that Zee met most merger conditions, with some pending due to the merger’s uncertain completion.

In response to the failed Sony deal, Chandra has not sought alternative partnerships with groups like Ambanis or Adanis, nor has he entertained offers from private equity firms, preferring to avoid further debt. He encourages his family, including his NRI son Amit Goenka, to invest in Zee, aiming for a significant stake increase.

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Playing patient: Chandra also addressed the recent SEBI investigation and Zee’s stock price drop, expressing confidence in the company’s recovery and urging shareholders to remain patient. He anticipates potential legal action from Disney regarding the ICC TV rights deal but remains confident in Zee’s standalone capabilities, emphasizing the company’s content creation strengths and independence from external financial assistance.

Chandra’s stance reflects his belief in Zee’s resilience and potential, despite recent challenges and market value erosion, as he calls for shareholder support and time for the current leadership to demonstrate their capabilities.

Price Action: ZEEL’s share price was up 1.62% to trade at ₹165.85 in early trade on Monday.

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