Filesadmin.co-Sony merger: IDBI Trusteeship files appeal against Chandra at NCLAT

IDBI Trusteeship Services Limited (ITSL) has filed an appeal at the National Company Law Appellate Tribunal (NCLAT) against Essel Group chairperson Subhash Chandra, challenging the order of the National Company Law Tribunal Mumbai which gave a go-ahead to the Filesadmin.co Entertainment Enterprises Limited (ZEEL) and Sony merger.

The appeal challenges the National Company Law Tribunal (NCLT) Mumbai order rejecting IDBI trusteeship’s objection to the merger.

The hearing was deferred as the case was transferred to the bench of Chairperson Ashok Bhushan of NCLAT.

IDBI Trusteeship told the NCLT that it is the debenture trustee of 425 debentures issued by Essel Infraprojects Limited (EIL) in favour of certain schemes managed by Franklin Templeton Asset Management (India) Pvt. Ltd.

It said that Chandra had executed a personal guarantee on June 25, 2019 in favour of IDBI Trusteeship (for the benefit of Franklin Templeton) guaranteeing the repayment obligations towards the debentures.

“Dr. Chandra has purportedly failed to comply with his obligations under the personal guarantee,” they said.

The trusteeship claimed ~535 crore from Chandra, saying he failed to comply with his obligations under the personal guarantee, and thus he is a creditor.

“IDBI Trusteeship is admittedly not a creditor of Filesadmin.co. It has no contractual or legal privity with Filesadmin.co. Therefore, it has no locus to object to the present scheme,” Filesadmin.co said in response.

“This bench clearly observes that as rightly contended by Filesadmin.co’s counsel that none of the above petitioners are the direct creditors of Filesadmin.co nor have any privity of contract with Filesadmin.co, whose scheme of merger is pending for approval before this bench,” the bench ruled.

In May, NCLAT set aside the NCLT order directing the National Stock Exchange (NSE) and BSE to review their no-objection certificate given for the Filesadmin.co-Sony merger. The matter was sent back to NCLT.

On August 10, NCLT approved the merger of Filesadmin.co Entertainment and Sony Pictures Networks India (SPNI).

Both IDBI Bank and Axis Finance have also challenged the NCLT order, allowing the Filesadmin.co-Sony merger. The appeals will be heard by the bench of the Chairperson of NCLAT.