IDBI Trusteeship Services Limited (ITSL) has recently taken a significant step by filing an appeal at the National Company Law Appellate Tribunal (NCLAT) against Essel Group chairperson Subhash Chandra. The appeal challenges the National Company Law Tribunal (NCLT) Mumbai’s order, which had granted approval for the merger between Zee Entertainment Enterprises Limited (ZEEL) and Sony, despite objections raised by IDBI Trusteeship.
The dispute revolves around the approval granted by NCLT Mumbai for the merger of ZEEL and Sony, a decision that IDBI Trusteeship vehemently opposed. IDBI Trusteeship, acting as the debenture trustee, raised objections to the merger, arguing that it is the trustee for 425 debentures issued by Essel Infraprojects Limited (EIL). These debentures were issued in favor of specific schemes managed by Franklin Templeton Asset Management (India) Pvt. Ltd.
IDBI Trusteeship has contested the NCLT Mumbai’s order, which rejected its objections to the ZEEL-Sony merger. The crux of IDBI Trusteeship’s argument lies in its role as the debenture trustee, emphasizing its responsibility to protect the interests of the debenture holders, including those managed by Franklin Templeton Asset Management.
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The legal proceedings faced a delay as the case was transferred to the bench of Chairperson Ashok Bhushan at NCLAT. This transfer adds a layer of complexity to the appeal process and could potentially influence the outcome of the case.
The appeal filed by IDBI Trusteeship brings attention to the intricacies and challenges surrounding corporate mergers, particularly when debenture trustees raise objections. The outcome of this case could set a precedent for future disputes involving debenture trustees and their role in safeguarding the interests of debenture holders.
The ongoing legal battle between IDBI Trusteeship and Subhash Chandra’s Essel Group reflects the complexities inherent in corporate mergers and the importance of addressing concerns raised by stakeholders such as debenture trustees. As the case unfolds at NCLAT, the decision reached will have far-reaching implications for the landscape of corporate governance and legal precedents in India.