ITV

Category: Regulators

  • TRAI extends consultation paper on ‘Digital Transformation through 5G Ecosystem’

    TRAI extends consultation paper on ‘Digital Transformation through 5G Ecosystem’

    Mumbai: The Telecom Regulatory Authority of India (TRAI) had sought comments / counter-comments of stakeholders on the consultation paper on “DigitalTransformation through 5G Ecosystem” dated 29 September 2023. The last date for receiving written comments and counter-comments from the stakeholders were fixed as 30 October 2023 and 13 November 2023 respectively.

    TRAI has received requests from industry associations for extension of time for submission of comments citing various reasons like difficulty in collating the essential information due to festivals. They have also mentioned that the paper covers very important issues pertaining to the policy challenges and right policy framework for faster adoption and effective utilisation of new technologies and thus requires detailed discussions and deliberations internally before responding to the consultation paper.

    Keeping in view the requests of stakeholders, it has been decided to extend the last date for submission of written comments upto 27 November 2023 and for counter-comments upto 11 December 2023.

  • Post SAT order impact – Media & entertainment – Win-win for Z-Sony

    Post SAT order impact – Media & entertainment – Win-win for Z-Sony

    Mumbai: The Securities Appellate Tribunal (SAT) passed an order on 30 October 2023 allowing Mr. Punit Goenka to become CEO and MD of the merged company, Zee Entertainment-Sony (Z-Sony). Based on our assessment of the detailed order (Zee SAT order) and channel checks with legal experts, we believe the SAT order is a positive for Goenka, as it states he can continue as MD and CEO, as there no strong evidence yet to support the allegations of money siphoning against him; further, his counsel has provided adequate evidence and documents to substantiate it.

    Post this order, there is a high likelihood the Securities and Exchange Board of India (SEBI) will appeal against the order in the Supreme Court to get a stay; however, Z-Sony merged co. can be formed with Goenka as its head in the interim. The SAT order also states the investigation in this case will continue; as per our assessment, the outcome could take 12-18 months; Goenka could obtain necessary legal recourse in case the outcome is against him in the medium term; if it is favourable, he will continue as usual.

    This underscores our view that there is no likelihood of Sony backing out from the merger, and Goenka getting relief could lead to expedited timelines for the merged entity to be formed with him at the helm, as it may not require changes in the term sheet or any shareholder and Board approval. Further, appeals made by Axis Finance and IDBI Bank will have no impact on the merger, and the NCLT approval is without any conditions. We believe the merged entity record date could be announced in the last week of November or in the first week of December, which means the merged firm could be listed in January 2024 (post six weeks of delisting). We maintain BUY with a Sep’24 TP of Rs 340.

    SAT order removes overhang on merger: Goenka to be reinstated as CEO of merged entity

    The SAT order is a significant victory for Goenka. Nevertheless, it is expected that SEBI will persist with its investigation, as the allegations against Zee Entertainment appear to hold merit. However, Sony will have to appoint Goenka as CEO of the merged company; further, this will not lead to change in the merged entity board and merger timelines. It is highly likely that SEBI will file a statutory appeal against the SAT order in the Supreme Court in the next 60 days. If this were to take place, the earliest date for a hearing would be scheduled for the first week of January 2024. Therefore, we believe there is no likelihood of Sony backing out of the merger as there are no legal constraints preventing it from proceeding. Further, the cases before the National Company Law Appellate Tribunal (NCLAT) against Zee will continue and will have no impact on the merger.

    SEBI to continue with the investigation without a timeframe

    As per the order, SAT has acknowledged the allegations of fund diversion have yet to be proven, and both Zee Entertainment (Z IN) and Goenka have presented satisfactory explanations supported by documentation, effectively fulfilling the burden of proof. Additionally, SAT also says it has noted factual inaccuracies in the order issued by whole-time members regarding specific companies that were classified as Essel Group companies when in fact they were not, but at this moment it is not fair to punish Goenka because the merger of Zee-Sony has been allowed. Nevertheless, SAT has granted SEBI the authority to proceed with its inquiry into the alleged fund diversion of Rs 42.1bn by Subhash Chandra and Goenka, without establishing a specific timeframe for the investigation. Z and Goenka have been instructed to cooperate with the investigation.

    Merged entity likely to be listed between December 2023 and March 2024

    We expect the merged entity to get listed anytime between December 2023 and March 2024.  This will depend on how Sony wants to take it forward. The RoC (Registrar of Companies) filing has been done and processes required for the merger could end in the next four weeks. The investigation timeline could vary between 12 and 18 months post the merged entity is formed. In case allegations are not proven, things will continue as usual. However, in case allegations are proven, Goenka may have to step down or find legal recourse. Post the merged entity is formed with Goenka as CEO, our checks with legal experts indicate that Sony may also support Goenka in legal proceedings against SEBI, which also provides comfort.

    We retain our positive stance on Z-Sony merged company

    In the newly configured merged entity Board, five out of nine directors would represent Sony, with the Chairman also hailing from Sony. This shift in Board composition is anticipated to lead to an enhancement in corporate governance at Z along with a change in management dynamic favouring Sony. We retain our positive stance, led by:

    1) synergistic benefits

    2) MNC control (superior corporate governance practices)

    3) positive impact of consolidation in the TV industry

    4) Scaling up of the OTT business.

    The credit of this article goes to Elara Capital SVP Karan Taurani

  • MIB empowers CBFC and I&B officials to remove pirated content

    MIB empowers CBFC and I&B officials to remove pirated content

    Mumbai: The Ministry of Information and Broadcasting has established an institutional mechanism for nodal officers to receive complaints against piracy and direct intermediaries to take down pirated content on digital platforms.

    After the parliament passed the Cinematograph (Amendment) Act, 1952 during this year’s Monsoon Session, Union Minister Anurag Singh Thakur stated that the Act aimed to curb film piracy, a measure which has been a long-standing demand of the film industry.

    The above action would allow instant action by MIB in case of piracy and will provide relief to the industry.

    The amendment includes strict punishment of minimum of three months’ imprisonment and a fine of Rs 3 lakh, which can be extended up to three years imprisonment and fine of up to 5 per cent of the audited gross production cost.

  • TRAI extends ‘Review of Regulatory Framework for Broadcasting and Cable services’

    TRAI extends ‘Review of Regulatory Framework for Broadcasting and Cable services’

    Mumbai: Telecom Regulatory Authority of India (TRAI) had released a consultation paper on “Review of Regulatory Framework for Broadcasting and Cable services” on 8 August 2023. The last date of receiving comments from the stakeholders on the issues raised in the consultation paper was initially fixed as 5 September 2023 and counter-comments as 19 September 2023.

    Due to requests received from stakeholders for extension of time for submission of comments from time to time, the last dates for receiving written comments and counter comments were extended up to 10 October 2023 and 25 October 2023 respectively.

    On requests received from the stakeholders for extension of time for submission of counter-comments on the above-mentioned consultation paper, it has been decided to further extend the last date for submission of counter-comments up to 1 November 2023. It is also reported that no request for any further extension of time for submission of counter-comments shall be entertained.

  • SAT sets aside SEBI order against ZEE promoters

    SAT sets aside SEBI order against ZEE promoters

    Mumbai: SAT has quashed SEBI’s order of barring Punit Goenka from holding key directorship in listed entities over the alleged fund-diversion case.

    Our view

    Implications of the event

    Scenario 1- This may expedite the Zee/Sony merger process; if SEBI gives a go ahead in favour of Punit Goenka, without going to the Supreme Court, post the detailed order that is to be released tonight. In this case, we expect the record date to be announced around last week of November 23. This in turn means that the listing of the merged co. will happen towards the first week of Jan ’24. Further, with Goenka coming on Board, there will be no need for any changes in the term sheet, or any Board/shareholder approval required for change in CEO; this also means that business will be as usual for ZEE and lesser transition time with little change in senior management.

    Scenario 2- SEBI can also move to the Supreme Court to appeal for a stay against SAT’s order. Further, the SAT order may only mention that Goenka can continue as CEO of Zee or the merged co; however, SEBI’s investigation on grounds of fraud may continue after this relief by SAT. This in turn means that there is still a high likelihood of the merger going through without Goenka. We believe there is a low likelihood of Sony allowing Goenka to continue as CEO of the merged Co, unless the issue with SAT is resolved (in case of SEBI going to Supreme Court). In this case, there may be a delay in the merger too, if Goenka changes his stance  and waits for the outcome of investigation; if Sony does not wait, then merger will go through as usual and the merged co will get listed by Jan’24

    Change in media landscape – a big benefit for Zee/Sony

    With Reliance wanting to acquire Disney, the media landscape on TV/OTT side will see a big consolidation as two large players – 1) TV18/Disney and 2) Zee/Sony could potentially command a market share of 67%/53% (TV18/Disney and Zee/Sony together) on TV/OTT in India; which could shift bargaining power in their favour and help them grow ahead of industry averages, as other players may scale down in the ecosystem

    No overhang of CG issues

    With Sony coming as a parent company, we expect no CG (corporate governance) issues in the future, which in turn will drive re-rating of valuation multiples for Zee.

    The stock has corrected more than 10 per cent from its peak over the last three months post the NCLT approval in Aug’23, citing delay on the merger. We await 1) the detailed order and 2) SEBI’s response on the above judgement order passed by SAT to allow Goenka to be a part of Z to assess the actual impact of the above decision for the merger and Goenka; we have a BUY recommendation on Zee with a Sept 24 TP of Rs 340 – we will await more developments over the near term on above.

    Background of the event

    • On 12 June 2023, SEBI banned ZEE promoters Chandra & Goenka from holding directorial, key managerial roles over allegations of fund siphoning. On 13 June 2023, ZEE promoters approached SAT against the order following which SAT provided SEBI 48 hrs. to file a reply against ZEE’s plea.

    • On 10 July 2023, two weeks of time were provided by SAT to ZEE promoters to file a response against the interim order. Meanwhile ZEE formed an interim committee of senior executives to run operations at the company.

    • On 14 August 2023, SEBI asked for 8 months of time to complete investigation of alleged fund diversion by Zee promoters (due to significant red flags in the transactions between Zee and Essel entities) which was again challenged by ZEE on 26 August 2023.

    • On 27 September 2023, SAT reserved order on the case after hearing from both the parties.

    • On 30 October 2023, SAT quashed SEBI’s order barring Goenka from holding key directorship in listed entities over the alleged fund-diversion case.

    The credit of this article goes to Elara Capital SVP Karan Taurani

  • TRAI extends the date of ‘Encouraging R&D in Telecom, Broadcasting, and IT (ICT) Sectors’

    TRAI extends the date of ‘Encouraging R&D in Telecom, Broadcasting, and IT (ICT) Sectors’

    Mumbai: Telecom Regulatory Authority of India (TRAI) had released a consultation paper on ‘Encouraging R&D in Telecom, Broadcasting, and IT (!CT) Sectors’ on 22 September 2023. The last date of receiving comments from the stakeholders was fixed on 23 October 2023 and counter comments by 6 November 2023.

    Considering the fact that the Authority has issued a number of consultation papers on different subjects in the recent past and enough time is made available to the stakeholders for submitting comments & counter comments, the Authority has decided to extend the last date for submission of comments up to 23 November 2023 and counter comments by 7 December 2023.

  • TRAI’s extends comments on ‘Draft Telecommunication Mobile Number Portability’

    TRAI’s extends comments on ‘Draft Telecommunication Mobile Number Portability’

    Mumbai: The Telecom Regulatory Authority of India (TRAI) has released a Draft Telecommunication Mobile Number Portability (Ninth Amendment) Regulations, 2023 on 27 September 2023. The last date for receiving written comments on the above-said draft regulations from stakeholders was fixed as 25 October 2023.

    Keeping in view the request of an industry association for extension of time for submission of comments, it has been decided to extend the last date for submission of written comments up to 8 November 2023. 

  • TRAI extends consultation paper on ‘Digital Inclusion in the Era of Emerging Technologies’

    TRAI extends consultation paper on ‘Digital Inclusion in the Era of Emerging Technologies’

    Mumbai: Telecom Regulatory Authority of India (TRAI) has released a consultation paper on “Digital Inclusion in the Era of Emerging Technologies” on 14 September 2023. The stakeholders were required to submit their comments by 16 October 2023 and counter comments by 31 October 2023.

    On request of stakeholders for extension of time for submission of comments on the above-mentioned consultation paper, it has been decided to extend the last date for submission of comments upto 16 November 2023 and counter comments upto 1 December 2023.  

  • TRAI extends date to receive comments on ‘National Broadcasting Policy’

    TRAI extends date to receive comments on ‘National Broadcasting Policy’

    Mumbai: Telecom Regulatory Authority of India (TRAI) had released a pre-consultation paper on Inputs for Formulation of “National Broadcasting Policy” on 21 September 2023.The last date of receiving comments from the stakeholders on the issues raised in the pre-consultation paper was fixed as 10 October 2023.

    Keeping in view the requests received from the stakeholders for extension of time for submission of comments on the above-mentioned pre-consultation paper, it has been decided to extend the last date for submission of comments up to 31 October 2023.

     

  • TRAI extends consultation paper on Broadcasting and Cable services

    TRAI extends consultation paper on Broadcasting and Cable services

    Mumbai: Telecom Regulatory Authority of India (TRAI) released a consultation paper on “Review of Regulatory Framework for Broadcasting and Cable services” on 8 August 2023. The last date of receiving comments from the stakeholders on the issues raised in the consultation paper was initially fixed as 5 September 2023 and counter-comments as 19 September 2023.

    On requests received from the stakeholders for extension of time for submission of comments on the above-mentioned consultation paper, it has been decided to further extend the last date for submission of comments and counter-comments up to 10 October 2023 and 25 October 2023 respectively.