NCLT's ZEE Insolvency Order Stays By NCLAT: Reports

ZEE was relieved when the National Company Law Appellate Tribunal (NCLAT) on Friday upheld a request made by its financial creditor IndusInd Bank under Section 7 of the Insolvency and Bankruptcy Code (IBC) to postpone the NCLT's judgment initiating insolvency proceedings against the broadcasting behemoth.

"We respect the decision taken by the Hon’ble National Company Law Appellate Tribunal (NCLAT) and remain committed to protecting the interests of all stakeholders. Our focus continues to be on the timely completion of the proposed merger," says Punit Goenka.

The network had guaranteed the bank's Rs. 150 crore loan to Siti Networks in a case from 2019 that saw the NCLT accept IndusInd Bank's insolvency claim against ZEE Entertainment. Siti Networks was required to keep an amount in the account that was equal to the interest and principal of a quarter at all times in order to service its debt. 

IndusInd Bank asserted a default of Rs. 83.08 crore against the media and entertainment company in their complaint, which was submitted in February 2022.

The merger of ZEE and Sony was put on hold when the insolvency petition was admitted. If a corporation admits to being insolvent, a moratorium takes effect, prohibiting the transfer of any assets, according to IBC.