The long-pending merger of ZEE and Sony ought to have completed its closure. But the sad reality is that despite good progress in the process and the all-essential CCI approval, it’s now stalled for a new insolvency plea. This freshly seen change of heart of an aggrieved party has now posed a question about the construct of the Insolvency and Bankruptcy Code (IBC) as a tool. Is it a tool for genuine lenders’ recourse to a settlement? Is it a tool for rebuilding an insolvent or bankrupt enterprise back to its true potential with effective change in equity capital base as well as promoters and management? Or, is it an arm-twisting tool for negotiating private settlements?

The latest roadblock, as in the insolvency plea, and the NCLT and NCLAT actions have slowed down the merger. Importantly, the spirit of the stakeholders involved in the merger.

I have written in the past that the proposed merger is good for the Indian media and entertainment ecosystem. The Zee scrip has been a good performer for its shareholders. Its other stakeholders have played a vital role in building the Indian media and entertainment industry over the past nearly 30 years. It has pioneered the sector and stood for ‘atmanirbhar’ brand power.

Zee Entertainment Enterprises Limited (ZEEL) has been facing criticism over the matter, with some saying that it should have given money to its sister entity. But that would have been poor governance. The shareholders and other stakeholders of ZEEL cannot be pulled along for the benefit of a few interested parties benefiting from such a cash accrual to its sister entity.

ZEEL has taken the legal route to protect its shareholders’ interest. It has shown steadfastness to protect the said amount, a small Rs 83 crore. In this case, the philosophy of what they are standing for is more important. On the same ideology of protecting shareholders’ rights, ZEE has challenged the NCLT order in NCLAT, despite it being dependent on the process for the merger with Sony.

In the post-Hindenburg chaos, it is important not to paint the Indian promoters and Indian entities with a tint of doubt and suspicion. One has to see the intent and steps that entities take in standing for what they claim as moral uprightness. Especially when it comes at a huge cost of time, finance and test of respect for the Indian promoters.

I see this ZEE standoff as an example of commitment to shareholders showed by Indian companies and promoters.

Dr Annurag Batra has been a media commentator and analyst for 22 years and has been writing on business, media and start-ups for the last two decades. He is the Founder & Editor-in-Chief of exchange4media and Chairman & Editor-in-Chief of BW Businessworld