Axis Finance, a subsidiary of private sector lender Axis Bank, has sent a legal notice to Zee Entertainment Enterprises (ZEE) and its promoters, Subhash Chandra and his son Punit Goenka, seeking to recover over ₹146 crore in dues before finalising the proposed merger of the company with Sony Pictures Network India (SPNI).

Denying all the contentions of Axis Finance, ZEE has said in its response that neither the company nor its MD and CEO Punit Goenka are party to any of the loan documents. The company has also pointed out that Goenka or the company did not provide any assurance to AFL for repayment.

In its notice, Axis Finance has demanded the clearing of the dues of two entities of the Essel Group, namely Cyquator Media Services and Primat Infrapower & Multiventures.

“If the payments are not made by you… either by yourself or by your group companies, to our clients within a period of seven days from the receipt hereof, our client will be left with no other alternative but to initiate appropriate legal proceedings against you, including to oppose the merger between ZEE and Sony,” said the legal notice sent by law firm MDP & Partners on December 30 on behalf of Axis Finance.

As per the notice, a copy of which was reviewed by ET, both Cyquator Media and Primat Infra had raised ₹100 crore each from Axis Finance.

The legal notice claimed that the lender had granted a credit facility to both the Essel Group companies and the pledges were created in various group companies, including Direct Media Distribution Ventures, Essel Corporate LLP and Primat Infrapower & Multiventures.

Since the borrower failed to repay the dues, Axis Finance invoked pledges and recovered a partial amount by selling shares of Direct Media and Essel Corporate.

Meanwhile, the lender has approached the Bombay High Court to recover over ₹60 crore from Cyquator. Simultaneously, Axis Finance is seeking to recover over ₹86 crore from Primat Infra.