Zee gets relief from NCLAT: Initiation of insolvency proceedings against Zee Entertainment stayed

The National Company Law Appellate Tribunal (NCLAT) on Friday (24 February) stayed the initiation of insolvency proceedings against Zee Entertainment Enterprises (Zee). The NCLAT has taken this step after Zee Entertainment's Chief Executive Officer (CEO) Punit Goenka challenged the insolvency proceedings against the company.
The NCLAT on Wednesday admitted IndusInd Bank's plea for insolvency proceedings against Zee Entertainment Enterprises Ltd. The company's Managing Director and CEO Punit Goenka on Thursday (February 23) approached the NCLAT for relief, a day after Zee Entertainment's plea to initiate bankruptcy proceedings was accepted.
A statement issued by Goenka's office said that he is taking all necessary steps to protect the interests of the stakeholders of Zee Entertainment. Efforts are being made to complete the proposed merger with Culver Max Entertainment (formerly Sony Pictures Networks India) at the earliest, the statement said.
The statement further said that Zee is a debt-free and financially sound company. The company always works for the interests of its shareholders. Earlier in an order on Wednesday, IndusInd Bank had petitioned the NCLAT to include Zee in the Corporate Insolvency Resolution Process (CIRP). On Wednesday, the NCLAT accepted the petition for hearing.
IndusInd Bank is a financial creditor of Ji. NCLAT had appointed Sanjeev Kumar Jalan as the interim resolution professional of the company. IndusInd Bank in its petition accused Zee of not paying Rs 83 crore. NCLAT had also accepted IndusInd Bank's petition filed against Essel Group's Citi Networks for hearing. On Wednesday itself, NCLAT appointed Rohit Mehra as the resolution professional for the company.
A day after Wednesday's developments, Zee's stock slumped up to 14% during trading on BSE on Thursday. At the close of trading, the company's stock had closed at Rs 198.75. In this way, the stock lost 3.75% compared to the previous trading session.
In the December quarter of the current financial year, Zee's net profit was Rs 24.3 crore and the revenue was Rs 2,111.2 crore. In the first 9 months of this year, the net profit of the company stood at Rs 243.81 crore. During the same period, the company earned a revenue of Rs 5,985.31 crore.