Zee urges tribunal to dismiss IndusInd Bank's insolvency plea

Media firm Zee Entertainment Enterprise Ltd (ZEEL) has moved an application before the National Company Law Tribunal (NCLT) requesting the dismissal of the plea filed by private sector lender IndusInd Bank against the company.

IndusInd Bank had moved NCLT claiming default of Rs 83.08 crore against the media & entertainment firm.

The petition, to initiate insolvency proceedings against ZEEL, has been filed under section 7 of the Insolvency & Bankruptcy Code (IBC).

"The company has on February 21, 2022 filed an interlocutory application before the NCLT, Mumbai Bench for dismissal of IndusInd Bank's petition under Section 7 of the Insolvency and Bankruptcy Code, 2016," said ZEEL in a regulatory update.

ZEEL has claimed that the petition by IndusInd Bank is an "act in breach/violation of the orders dated February 25, 2021 and December 3, 2021 passed by the Delhi high court".

Earlier this month, while sharing the details, ZEEL had said it is a party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) entered into with IndusInd Bank Limited for the term-loan facility advanced to another Essel Group firm Siti Networks Ltd.

Siti Networks, formerly known as Wire and Wireless Ltd, is a multi-system operator promoted by media baron Subhash Chandra led Essel Group.

According to ZEEL, "the issue of the Company's alleged default under the DSRA Guarantee Agreement, is sub-judice before the Delhi high court" in a suit filed by the company against IndusInd Bank."Filing of the said C1RP Application is in breach of the order dated 25th February 2021 as modified by the order of December 3, 2021 passed in the said suit," it said, adding "the company will therefore be adopting appropriate legal steps in that regard".

On December 22 last year, ZEEL announced its merger with Sony Pictures Networks India Pvt Ltd (SPNI) after signing definitive agreements.

As per the deal, Sony would invest $1.575 billion and hold 52.93 per cent stake in the merged entity and Zee the remaining 47.07 per cent.