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News: Zee entertainment's operational creditor, Indian Performing Right Society (IPRS), has approached the Mumbai-bench of the National Company Law Tribunal (NCLT) and registered its case under Section 9 of the Insolvency and Bankruptcy Code, 2016. The petition has been filed for the "initiation of corporate insolvency resolution process against the company, claiming a debt and default of Rs 211 crore towards royalty payable for utilization of “literary and musical works
Views: Zee has said it will be filing a reply "rejecting the claim" on the ground that there is a "pre-existing dispute" between the parties on the claimed amount. The claim sought by the operational creditor is, thus, not in consonance with the interpretation of the law on the point of payment of royalties for "literary and musical works" by the Delhi High Court, and hence, the claimed amount is not due or payable to IPRS. While legal remedy is available and the merger is likely to go ahead for Zee-Sony, these interventions may delay the original timelines of completion by Q4FY23 end.
Impact: Negative