The National Company Law Tribunal has directed Zee-Entertainment Enterprises to convene a meeting of their shareholders to secure their approval for its proposed merger with Culver Max Entertainment, formerly Sony Pictures Network.

Passing an order, the Mumbai bench of the NCLT had on August 24 directed to call a meeting of the equity shareholders of Zee Entertainment to consider the merger, said a statement from Zee.

“The NCLT Mumbai bench has directed in its order, that a meeting of the Equity Shareholders of Zee Entertainment Enterprises Ltd. be convened and held on Friday, 14th October 2022 for the purpose of considering, and if thought fit, approving the proposed merger of the Company with Culver Max Entertainment Pvt Ltd,” said a company spokesperson.

The NCLT said the shareholders’ meeting should be held virtually through video conferencing or other audio-visual means for approving the proposed scheme.

The merger, which will create the largest entertainment network in India with a 26 per cent viewership share, is currently being scrutinised by the Competition Commission of India (CCI).

According to some media reports last week, the CCI made some observations about the merger.

An initial CCI review has flagged concerns, arguing the group would have “unparalleled bargaining power” with 92 channels coupled with Sony’s $86 billion in global revenues, according to Reuters.

The CCI has called for further investigation, highlighting the impact on competition due to the “strong” market position the merged entity would have over advertising and channel pricing, particularly in the popular Hindi language segment.

Earlier in July, Zee Entertainment had said it has received approval from stock exchanges BSE and NSE for its proposed merger with Culver Max Entertainment. Last year in December, the two media companies signed definitive agreements for the merger of ZEEL into Sony Pictures Network India (SPNI) following the conclusion of an exclusive negotiation period during which both parties conducted mutual due diligence.

When the merger deal was announced in September last year, the two networks had stated that Sony would invest $1.575 billion and hold a 52.93 per cent stake in the merged entity and Zee the remaining 47.07 per cent.

After closing, the new combined company will be publicly listed in India.

Zee Entertainment Enterprises reported a 48.94 per cent fall in consolidated net profit at Rs 106.60 crore for June quarter 2022-23 on account of challenging macroeconomic conditions.

The company had reported a net profit of Rs 208.78 crore in April-June period a year ago, Zee said in a BSE filing.

Total income was Rs 1,879.53 crore against Rs 1,808.56 crore in the year-ago period.

Budget drill from October 10

The finance ministry will kick-start the exercise to prepare the annual budget for 2023-24 from October 10 in the backdrop of a revival of the Indian economy and fears of a recession in developed countries.

The budget for the next year will have to address critical issues of high inflation, low demand, job creation and of putting the economy on a sustained 8 per cent-plus growth path.

Earlier in the day, finance minister Nirmala Sitharaman said inflation is no longer “red-lettered” and the priority for the government now is job creation and boosting growth.

“Some of course are red-lettered (priorities), some may not be. Red-lettered ones would of course be jobs, equitable wealth distribution and making sure India is moving on the path of growth. In that sense inflation is not red-lettered. We have shown that in the past couple of months that we were able to bring it to a manageable level,” she said.