In 2019, Subhash Chandra had to step down as the Chairman of Zee Entertainment, after he was forced to sell 16.5 per cent of his stake in the firm to repay loans. The media baron and his family had borrowed Rs 7,000 crore from local and Russian lenders, to finance infrastructure projects that failed to generate expected returns. Now his son Punit Goenka is battling to save Zee from insolvency over a default by another entity, Siti Cable.
Siti and Zee's connection
Founded by Subhash Chandra, Siti is a part of the Essel Group owned by his family, and took a loan of Rs 150 crore from IndusInd Bank. Zee Entertainment was the guarantor for this loan, which Siti hasn't been paying back since 2019, and the default as of now stands at Rs 89 crore. Based on this, the National Company Law Tribunal (NCLT) accepted the bank's plea to initiate insolvency proceedings against Zee.
Fighting to save the big media merger?
Now Zee Entertainment CEO and MD Punit Goenka, who is Subhash Chandra's son, has opposed the NCLT order in the appellate tribunal NCLAT. He argues that the firm is in a position to protect interests of all stakeholders through a merger with Sony owner Culver Max Entertainment. The merger between the two Indian television giants was contested in the NCLT by Zee's lenders IDBI, IndusInd and Axis, and that case has been adjourned till March 9.
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