Bengaluru, June 22 (Reuters) – ZEE Entertainment to merge (ZEE.NS) and the Indian branch of Sony Japan (6758.T) Punit Goenka told the Economic Times that he would go through the process “whether he is the CEO of the combined company or not”.
India’s market regulator imposed a one-year ban on Zee Entertainment Chairman Subhash Chandra and CEO Goenka for their active involvement in transferring company funds to related entities in the group, raising questions about the future of Zee’s merger with Sony.
Goenka will become managing director and CEO of the combined entity, leading a $10 billion television business.
“Regardless of my position as CEO, the merger of ZEE and Sony makes enormous sense. The resulting entity will be under the control of Sony, who have chosen to retain me as a promoter, managing director and CEO,” Goenka told The Economic Times.
These comments come after Sony explain On Wednesday, the company took the SEBI ban on Chandra and Goenka “seriously” and will monitor developments that could affect the deal, which is due to be announced in 2021.
Zee did not immediately respond to a Reuters request for comment.
“But should the merger be allowed to fail if the law prohibits me from taking these positions? Such an outcome would have a negative impact on everyone involved in the ecosystem and the industry as a whole,” Goenka told The Economic Times.
Some analysts agree with Goenka.
Karan Taurani, an analyst at brokerage Elara Capital, said: “If Puneet (Goenka) fails to obtain relief in national courts, the merger will proceed without him and Sony representatives will as CEO.”
Zee shares opened 2.6 percent higher on Thursday and rose as much as 3 percent intraday.
Reporting by Indranil Sarkar in Bengaluru, Additional reporting by Biplob Kumar Das; Editing by Nivedita Bhattacharji
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