Sony says tracking developments which ‘may affect’ deal with India’s Zee

By Sethuraman N R and Aditya Kalra

BENGALURU (Reuters) -Sony Pictures Entertainment said on Wednesday it took “seriously” an Indian regulator’s ban on Zee Entertainment’s founder and CEO from holding board positions and will monitor developments that may affect its deal with Zee.

This is Sony’s first comment since the Securities and Exchange Board of India (SEBI) one-year ban announced last week against Zee Group Chairman Subhash Chandra and CEO Punit Goenka, saying they had been actively involved in diverting company funds to the group’s related entities.

Zee and an Indian unit of Japan’s Sony Group announced a merger in 2021 to create a $10 billion TV enterprise, with Goenka set to become the merged entity’s managing director and CEO, but regulatory approvals are still pending.

“We take very seriously the SEBI interim order and will continue to monitor developments that may affect the deal,” Sony’s statement said.

The latest ban on Goenka by SEBI has triggered worries about potential further delay to the Sony deal.

After Sony’s statement, Zee shares pared gains and were trading up 4%.

Zee had denied SEBI’s allegations.

Chandra and Goenka have challenged the ban at an Indian appeals tribunal, which is yet to rule on the case. SEBI is arguing the appeals should be dismissed “and no relief must be granted in the interest of the securities market.”

The deal has been delayed in recent months due to multiple reasons including notices from India’s antitrust watchdog and reports that stock exchanges were reconsidering approvals for the merger.

Last year, Zee and Sony offered concessions such as pricing discounts to help ease regulatory concerns and received an antitrust approval for the merger.

Zee did not immediately respond to a request for comment.

(Reporting by Sethuraman NR in Bengaluru and Aditya Kalra in New Delhi; editing by Sohini Goswami, Jason Neely and Louise Heavens)