NCLT to hear Zee lenders’ pleas against merger in January

The Mumbai bench of the National Company Law Tribunal (NCLT) consisting of HV Subba Rao and Satya Ranjan Prasad has granted IndusInd Bank, Axis Finance (AFL), and IDBI Bank permission to file applications to intervene in the proposed merger.

The tribunal has also instructed the Registrar of Companies (RoC) and the regional director of the ministry of corporate affairs to submit a report before the scheduled hearing on January 12.

ET has reported previously that AFL, the non-banking financial arm of Axis Bank, had requested the NCLT-appointed Resolution Professional Raj Kamal Saraogi to intervene and take preventive steps to stop the amalgamation scheme between the three companies.

IDBI and IndusInd Bank have also opposed the merger.

On May 30, Saraogi was appointed RP by NCLT, New Delhi to initiate the insolvency resolution process against Zee promoter Subhash Chandra on an appeal filed by Indiabulls Housing Finance. In a communication to Saraogi, AFL pointed out that Chandra’s Essel Mauritius entered into a non-compete agreement with SPE Mauritius Investments, a Sony group company, as part of the merger deal between Sony and Zee. Under the agreement, SPE Mauritius will pay a non-compete fee of ₹1,100 crore to Essel Mauritius, an Essel Group company.

The finance company said the agreement was contrary to a Supreme Court order of August 5.
The top court, which has yet to pass a final order in the matter, had restrained Chandra from alienating or disposing of any assets or legal rights, or beneficial rights.

Senior Advocate Janak Dwarkadas and Nitesh Jain of Trilegal are representing Zee Group, while IDBI Bank is being represented by Advocate Zarir Bharucha of law firm ZBA, and IndusInd Bank by Peshwan Jehangir of Khaitan & Co. Nishith Dhruva of MDP & Partners is representing Axis Finance.