Zee Entertainment Enterprises Ltd said it had settled with the Indian Performing Rights Society (IPRS), and the insolvency filing against it will be dropped.
IPRS – the representative body of music owners and composers who collect royalties on behalf of artists, has filed an insolvency petition with the National Company Law Tribunal (NCLT), alleging that Zee had not paid dues of around Rs 211 crore in January.
In a regulatory filing, Zee said the company and IPRS “today jointly entered into a settlement agreement based on agreed terms that all disputes and claims have been resolved.”
“Therefore, IPRS has agreed to withdraw the above-mentioned insolvency application filed by them,” it added.
Details of the settlement were not disclosed in the regulatory filing.
Earlier, in filing for insolvency, the artist group claimed that Zee was in arrears with royalties due to the use of “literary and musical works.” In a pre-deal response, the media company denied the allegation, saying IPRS’ claim did not fit the law’s interpretation of royalties payments for literary and musical works.
A settlement was reached with IPRS when Zee was embroiled in a legal dispute with IndusInd Bank, which filed an insolvency application against the company with NCLT. Zee is the guarantor of the Rs 150 crore loan provided by IndusInd Bank to Essel Group’s Siti Networks. However, it allegedly failed to fulfil the debt servicing reserve account guarantee agreement with a shortfall of Rs 83 crore.
While NCLT had admitted insolvency proceedings on February 22 at the bank’s request, the National Company Law Appellate Tribunal (NCLAT) last week suspended the order. It will hear the case again on March 29.
Shares of Zee closed at Rs 195.35 per share on the BSE on March 6, 4.6% below its previous close.