Bombay High Court dismisses Zee promoters’ petition against loan-default order

Justice Abhay Ahuja was hearing the petition filed by Zee promoters Cyquator Media, Essel Corporate LLP and Direct Media Distribution Ventures, who claimed the order would cause them “grave prejudice”.

In December 2023 the Bombay High Court directed Cyquator Media to deposit ₹61.64 crore after it defaulted on repayments to Axis Finance, the non-banking subsidiary of Axis Bank. The review petition said Axis Finance had filed the suit to pressure them into paying money they didn’t owe it, adding that the suit was not maintainable.

In its suit in the high court, Axis Finance had said it was looking to recover a term loan of ₹100 crore it gave Cyquator Media through agreements signed in June 2018. The loan was for three years and carried an interest of 10.35 % a year. Any delay or default in payments would attract an additional interest of 2% a year.

In September 2019, Cyquator started to default on interest payments and, despite repeated requests, defaulted on multiple occasions, Axis Finance said. It also claimed Cyquator continued to pledge shares in favour of other lenders and creditors while persistently defaulting on its obligations towards Axis. “It is submitted that this demonstrates the company’s mala fides and clear lack of intention to rectify defaults towards the loan account of the Axis,” Axis Finance said.

Counsels Karl Tamboly, Hrushi Narvekar and Niyati Merchant of MDP and Partners represented Axis Finance, while ANB Legal appeared for the Zee promoters.

Restructuring

Last week, Mint reported that Zee Entertainment Enterprises Ltd’s board of directors has endorsed a new organisational framework proposed by managing director and CEO Punit Goenka.

Goenka, who will assume direct charge of the domestic broadcast business, had proposed to leverage synergies among the core business segments which include broadcast, digital, movies and music.

The new structure, effective immediately, will see Siju Prabhakaran, who has led the south cluster of channels take additional responsibility for the west cluster, and report to Goenka.

Samrat Ghosh, who has led the east cluster of channels, will take additional responsibility for north and premium clusters, while Ruchir Tiwari will continue to lead the Hindi movies cluster.

Vishnu Shankar will continue to lead &TV and the free-to-air segment, and Ashish Sehgal will be responsible for integrated advertisement sales for the broadcast and digital business, to maximize value for the advertisers with a sharp focus on profitability. All of them will report to Goenka.