zeel puneet goenka: ZEEL MD & CEO Punit Goenka challenges NCLT’s insolvency order before NCLAT

Goenka sought relief from the National Company Law Appellate Tribunal (NCLAT) against the order issued by the National Company Law Tribunal (NCLT), which admitted ZEEL into the Corporate Insolvency Resolution Process (CIRP).

As per the supplementary cause list of the NCLAT, Goenka’s plea is listed for admission on Friday before the bench of chairperson Ashok Bhushan and Member Technical Barun Mitra.

The NCLT had appointed Sanjeev Kumar Jalan as the insolvency professional for the company.

“(I have) filed an appeal in the… NCLAT today, seeking relief against the order,” Goenka said in a statement.

Goenka said that he is taking all required legal actions to preserve the interests of all ZEEL stakeholders and to complete the proposed merger with Culver Max Entertainment (Sony) on time .

“Mr Goenka firmly believes in the potential of the merger, to deliver immense value to all stakeholders. ZEE is a debt-free and financially strong company, and believes in value creation for its stakeholders,” added the statement signed by Goenka.Apart from ZEEL, the bankruptcy court had also admitted Siti Networks for insolvency proceedings. The Mumbai bench of the NCLT has appointed Mohit Mehra as the resolution professional for Siti Networks.

ZEEL and Sony are in the process of merging their operations. The two companies have already received conditional approval from the Competition Commission of India (CCI). The stock exchanges and ZEEL’s shareholders have also approved the deal.

“With the admission of ZEEL into insolvency, the proposed merger process will likely come to a standstill. In the current situation, when the management has approached the appellate tribunal against the insolvency order, the NCLAT will intervene only in very limited circumstances,” said Sudip Mahapatra, partner at S&R Associate. “Alternatively, it can seek the withdrawal of the insolvency proceedings with the consent of 90% of the committee of creditors.”

Ketan Mukhija, partner at Link Legal, said: “ZEEL may proactively settle, resolve, or restructure the outstanding debt with IndusInd Bank Limited. It may then prefer to file an appeal before the NCLAT, for the stay and dismissal of the NCLT order, on the strength of the settlement/restructuring agreement executed between the parties or request the Bank through the IRP to file an application with NCLT itself for withdrawal of application admitted under Section 7 of IBC.”

Another lawyer, who works with a leading law firm, said that the Sony-Zee merger will not get derailed because of the NCLT order.

“This development will not have much of an impact on ZEEL’s merger with Sony. At best, it will delay the process, but it will not be an inordinate delay. Companies normally do their due diligence in these kinds of merger deals.”