Zee Entertainment Enterprises (ZEEL) fell 1.34% to Rs 239.90 after an operational creditor filed Rs 211.41 crore insolvency case against the company.
An operational creditor has filed a petition against ZEEL under Section 9 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT), Mumbai Bench.The creditor has claimed a debt and default of Rs 211,41,82,521, towards royalty payable for utilization of "literary and musical works".
"A Petition has been filed against the Company under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, by the Indian Performing Right Society Limited (IPRS), an Operational Creditor, before the Hon'ble National Company Law Tribunal, Mumbai Bench for initiation of Corporate Insolvency Resolution Process against the Company, claiming a debt and default of Rs. 211,41,82,521/-, towards royalty payable for utilization of 'literary and musical works'," the company said in a notification on Monday, 2 January 2023.
Zee said it will file its reply rejecting the claim on the ground that there is a pre-existing dispute between the parties on the claimed amount. The claim is 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.
The company said that the expected financial implications, if any, due to compensation, penalty etc is unascertained as the matter is disputed and sub-judice.
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ZEEL is a media & entertainment company offering entertainment content to diverse audiences. It is present across broadcasting, movies, music, digital, live entertainment, and theatre businesses, both within India and overseas.
ZEEL's consolidated net profit tumbled 58.2% to Rs 112.89 crore in Q2 FY23 as against Rs 270.16 crore recorded in Q2 FY22. Revenue from operations rose 2.5% to Rs 2,028.40 crore in quarter ended 30 September 2022 from Rs 1,978.79 crore posted in the same period a year ago.
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