Sony, Zee merger on despite Sebi shadow

The Japanese firm is committed to the deal in its original form

- Anirudh Laskar & Gaurav

Sony Corp. has no plans to back out of the merger of Sony Pictures Networks India (now Culver Max Entertainment Pvt. Ltd) with Zee Entertainment Enterprises Ltd, despite allegations of funds diversion made against its promoters Subhash Chandra and Punit Goenka by India’s markets regulator.

Sony remains fully committed to the merger in its original shape, three people with direct knowledge of the matter said, amid market concerns over the fate of the $1.7 billion deal.

Ravi Ahuja, the chairman of global television studios and corporate development at Sony Pictures Entertainment, made a two-hour presentation to the board of parent Sony Corp. in Tokyo on Tuesday, taking stock of the ongoing developments and the prospects of India’s largest media and entertainment deal, one of the people said.

“For Sony, nothing has changed. After the board meeting on Tuesday, they conveyed their full commitment to the merger," the person said, requesting anonymity. “There is a plan for the worst-case scenario—if Goenka doesn’t get a relief from the courts—but as of now, there is no discussion on that."

On 12 June, the Securities and Exchange Board of India (Sebi) issued an interim order alleging that Chandra and Goenka siphoned off funds and barred the father-son duo from holding any position on the board or key managerial positions in any listed company. While Chandra stepped down as Zee chairman in 2019, his son, Punit, is Zee’s managing director and chief executive officer (CEO).