Essel Group Chairman Subhash Chandra is all set to receive a Rs 1,100-crore non-compete fee from Sony Group. But lenders to the group will be asking for payments to their dues from the influx of funds, reported the Mint. SPE Mauritius, a Sony group company, will be paying Rs 1,100 crore to Essel Mauritius, a promoter entity of Essel Group. According to the investment agreement, the sum will be used to raise the stake of Zee founders in the upcoming merged entity.

People aware of the matter told the publication that some of the lenders will contest the decision of the company court which approved the proposed Zee-Sony merger if Chandra declines from paying the dues.

Many of the loans given by financial institutions and non-banking financial entities to Essel Group were on the back of personal guarantees given by Chandra. IndusInd Bank, Axis Finance, YES Bank and Jammu and Kashmir Bank are some of the lenders that have given loans to Chandra’s private ventures.

“Lenders can move a petition (before the National Company Law Tribunal) saying the non-compete money which the promoters are getting, that money should be utilised to repay lenders. But to stop the transaction between Zee and Sony is difficult," one of the sources working with one of Essel’s NBFC creditors was quoted as saying by Mint.

IndusInd Bank and YES Bank are already litigating against Zee Entertainment over non-payment of dues in various courts while Axis Bank subsidiary, Axis Finance, had sent a legal notice to Zee for payment of Rs 146 crore, failing which it would oppose the Zee-Sony merger in court.

In response, promoters of the company have stated that the previous debts of Subash Chandra will have no bearing on the upcoming deal.

“Any such promoter borrowing arrangements do not have any linkages with Zee Entertainment, and therefore, any such frivolous proposed actions against the Zee Sony merger,” a spokesperson for Subhash Chandra said.

But if any of the creditors of the group do approach the NCLAT under the Insolvency and Banking Code, 2016, it would open the doors for other creditors to stake their claim under the process as well.

Read Also | Worried Sony-Zee deal will enrich Chandra family at cost of shareholders: Invesco

(Edited by : Thomas Abraham)