Sony's Merger Negotiations with Zee Enterprises Hit Stalemate Over CEO Indemnity

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Sony,Zee Enterprises,Merger

Sony Group Corp.'s lawyers were surprised by Zee Enterprises Entertainment Ltd.'s request for a 'hold harmless' clause for its CEO, Punit Goenka, during their merger negotiations. Goenka was concerned about potential witch hunt by Sony after the merger, while Sony executives were wary of his financial impropriety accusations. The weeks-long stalemate was revealed by anonymous sources.

IN November, Sony Group Corp.’s lawyers got a nasty surprise during a routine call from the legal team of Zee Enterprises Entertainment Ltd. Nearly two years into tortuous merger negotiations to create a $10 billion Indian entertainment giant, Zee wanted the Japanese company to agree to a so-called “hold harmless” clause for its Chief Executive Officer, Punit Goenka, just weeks before the December 21 deal deadline.

Already wary of Goenka, who had been accused of financial impropriety by India’s markets regulator several months earlier, Sony executives wondered why he requested indemnity. On his part, Goenka was worried that Sony would start a witch hunt against him after the merger was completed and it got what it wanted: access to Zee’s deep library of local entertainment content. The account of this weeks-long stalemate was pieced together by speaking to people familiar with the matter who asked not to be identified, as the talks were privat

 

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