The case describes the attempt by Zee Entertainment Enterprises Ltd (ZEEL) to merge with Sony Corp's Indian television business and how its corporate governance problems led to the failure of the merger deal.

Zee Entertainment Enterprises Ltd.’s journey started with the launch of Zee TV, India’s first private television channel, in October 1992 in collaboration with Hong Kong-based Star TV. The company, then known as Zee Telefilms Ltd till 2007, was part of Essel Group, headed by Mr.Subhash Chandra. ZEEL evolved as a media giant in the next two decades with around 70 national and international channels, an OTT Platform called ZEE5, and a movie studio. Mr.Chandra's elder son, Mr.Punit Goenka, has been managing ZEEL as its Managing Director and CEO since 2009.

However, the growing debt burden of the Essel group started affecting ZEEL in the late 2010s, though the media business continued to do well. In order to overcome the debt problem, by November 2018, the promoter family, headed by Subhash Chandra, decided to sell part of their stake in ZEEL. However, corporate governance problems started surfacing in ZEEL, affecting the promoter's stake sale plans. The group managed to sell the stake by the end of 2019, although governance problems continued to persist. In addition, the promoters continue to retain management control in the company, though their shareholding has fallen below 5% in 2021, and Mr.Goenka remained as the MD and CEO. However, in September 2021, the largest shareholder in ZEEL, Invesco Oppenheimer, raised the governance problems and demanded the removal of Mr.Goenka from the MD position. Three directors' including independent directors, also resigned, quoting serious corporate governance problems in ZEEL. Within days, ZEEL proposed a merger with the Indian media and television arm of Sony Corporation, and the agreement was signed to complete the merger by December 2023. As per the agreement, Sony would have majority control in the merged entity, which would be headed by Mr.Goenka. Both parties initiated processes to complete the merger and sought approvals and legal permissions.

However, corporate governance issues continued to plague ZEEL. In mid-2023, Indian securities market regulator SEBI banned Mr.Chandra and Mr.Goenka from taking board positions in any of the listed firms in cases involving illegal fund diversion from ZEEL. Though both of them managed to get a stay for the ban, the investigations on the case continued. As a result, Sony wanted to have its executive head the combined entity instead of Mr.Goenka. The media report indicated that it was unacceptable to ZEEL promoters, and the deal was called off.

Meanwhile, two other competitors of ZEEL, Reliance Industries controlled Viacom18 and Disney-Star, merged to form India's largest media giant, making the competition challenging for ZEEL. In November 2024, Mr.Goenka resigned as the managing director of ZEEL and retained the CEO position. The shareholders rejected his reappointment to the ZEEL board a few days later. The long-term future of ZEEL depended on the ZEEL board resolving the governance problems and providing the right strategic direction for the company.