Sony Group is planning to call off a merger between its India unit and Zee Entertainment Enterprises, people familiar with the matter said, capping two years of drama and delay in creating a $10 billion (?1.43 trillion) media giant.

The Japanese conglomerate is looking to cancel the deal due to a standoff over whether Zee Chief Executive Officer Punit Goenka, also its founder¡¯s son, would lead the merged entity, the people said, asking not to be named as the information is not public. While the agreement signed in 2021 was that Goenka would lead the new company, Sony no longer wants him as CEO amid a regulatory probe, the people said.

Sony plans to file the termination notice before a Jan. 20 extended deadline for closing the deal, saying some of the conditions necessary for the merger had not been met, one of the people said. Goenka has stood his ground over prolonged meetings in the past few weeks in wanting to helm the merged entity, as agreed initially, according to another person.

Discussions are still ongoing between the two sides and a resolution can still emerge before the deadline.

Representatives for Sony and Zee did not immediately respond to an email and phone calls seeking comment.

The scuttling of the deal due to the last-lap leadership tussle will not only leave Zee vulnerable to possible defaults, it¡¯s coming at a time when billionaire Mukesh Ambani is seeking to bolster his Reliance Industries¡¯ media ambitions by negotiating a merger with Walt Disney¡¯s India unit.

The Sony-Zee merger aimed to create a $10 billion media behemoth with the financial muscle to take on global powerhouses Netflix and Amazon as well as local heavyweights such as Reliance.

When Mumbai-based Zee had requested for an extension of a Dec. 21 deadline by a month, Sony said then that it wanted to hear Zee¡¯s proposals on completing the ¡°remaining critical closing conditions.¡±

The Securities and Exchange Board of India alleged in June that Zee faked the recovery of loans to cover private financing deals by its founder, Subhash Chandra. Chandra and his son, Goenka, ¡°abused their position¡± and siphoned off funds, the board said in an interim order, barring Goenka from executive or director appointments in listed companies.

While Goenka got a reprieve from an appellate authority against the order, Sony views the ongoing probe as a corporate governance issue.

Sony Pictures Networks India would have owned a 50.86% stake in the merged media firm and Goenka¡¯s family was to own 3.99% in the proposed transaction, according to the 2021 agreement. The proposed merger has received almost all regulatory approvals and would have helped expand Sony¡¯s media business in the world¡¯s most-populous country.