Indian Performing Right Society (IPRS), an operational creditor to Zee Entertainment Enterprises (ZEEL), has filed an insolvency petition against the media firm claiming Rs 211.42 crore of debt.
The operational creditor has sought initiation of an insolvency process against the company. The petition was filed before National Company Law Tribunal’s Mumbai bench under Section 9 of the Insolvency and Bankruptcy Code (IBC), ZEEL said in a regulatory update.
Terming the amount unascertained as the matter is disputed and sub judice, ZEEL said the creditor is claiming debt and default towards royalty payable for utilisation of “literary and musical works”.
ZEEL will file its reply rejecting the claim on the ground that there is a pre-existing dispute between the parties on the claimed amount. Further, the claim is not in consonance with the interpretation of the law on the point of payment of royalties, it added.
In December, IDBI Bank had filed an application seeking initiation of insolvency proceedings against ZEEL, claiming Rs 149.60 crore of default. The bank’s claim arises under a debt service reserve agreement entered into by the bank and ZEEL for a financial facility availed by Siti Networks, ZEEL had said then.
ZEEL had “vehemently” disputed the bank’s claim. SITI Networks, formerly known as SITI Cable Network, is an Essel Group company. In April, Housing Development Finance Corporation (HDFC) had moved NCLT against SITI for alleged default of Rs 296 crore, and prior to that in February 2020, IndusInd Bank had moved the bankruptcy court seeking payment of more than Rs 89 crore from ZEEL.