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Legal Correspondent: Saura Patil
November 12, 2021: Zee Entertainment has become a household name in India. However, it isn’t without its up and downs. Zee Entertainment has constantly been in news for a long time now with respect to its shareholders and MD & CEO Punit Goenka. Recently Zee initiated legal proceedings against a termination of contract made to provide media content on trains.
A subsidiary of Zee, popularly known as Margo Networks, had entered into a content-on-demand (COD) contract with RailTel Corporation of India in 2020, with the objective of providing media content in all express and suburban trains and all Wi-Fi facilitated railway stations. RailTel Corporation is one of the largest neutral telecom infrastructure providers in India. It’s a public sector undertaking that owns optical fibre network on the exclusive Right of Way (ROW) along the railway track, nationwide.
Zee Entertainment Enterprises Ltd. (ZEEL) said, in a regulatory filing that the contract which was on a build-own-operate basis for a decade, was recently terminated by the RailTel Corporation of India on November 11, 2021. ZEEL confirmed that it initiated legal proceedings against RailTel Corporation of India regarding the termination of the said agreement with its subsidiary for providing media content in trains. Zee said, without disclosing why the contract was terminated, “The Company has initiated appropriate legal proceedings against the notice of termination”.
RailTel Corporation of India share price fell by 1% on November 12, 2021 after the company terminated COD contract with Margo Networks. Zee Entertainment’s shares fell 0.72% to settle at Rs. 311.80 apiece on National Stock Exchange. Zee’s consolidated net profit more than doubled to Rs. 270 Crore in the September quarter, while revenue rose 15% to Rs. 1978 Crore.
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