Amid the escalating fight with Zee Entertainment's largest shareholder Invesco, which has called for the MD and CEO, Punit Goenka's removal from office, the latter came out with a statement. Goenka said on Thursday that he will continue to take required steps to safeguard the company and its future under the guidance of its board.
Breaking his silence after almost a month since the boardroom war began, Goenka questioned the intention of Invesco while pointing fingers at the investment firm over corporate governance for not making public a proposed deal with Reliance Industries earlier.
"...on a personal note, I have some questions as well. Why didn't Invesco make its plans public earlier? Does good corporate governance only apply to corporates and not their institutional investors?" Goenka asked in a statement issued by his office.
Invesco along with OFI Global China Fund LLC hold a 17.88 percent stake in Zee Entertainment Enterprises Ltd (ZEEL) and have been pressing for an Extraordinary General Meeting (EGM) to discuss various issues, including the removal of Goenka and appointment of its nominees on the company's board.
Goenka sheds light on merger proposal with Reliance
The statement talks about a merger proposal brought forward by Invesco in February involving Reliance Industries, which was rejected by him as it would have resulted in loss of shareholder value to the tune of Rs 10,000 crore.
"During my briefing to the Board, I emphasised on the points pertaining to the proposal from Invesco. My attention was on the imbalance observed in the valuation and how it was not in the best interest of our shareholders. The only reason I did not agree to the proposal was because the shareholder value was getting compromised," Goenka said in his statement.
"I will withstand any amount of pressure to preserve ZEE's intrinsic value and ensure that nothing impacts the returns being delivered to all the shareholders," he added.
According to Goenka, the fight with Invesco is to ensure ZEEL continues to gain immense growth opportunities and become a stronger and more formidable player in the media and entertainment sector.
Goenka stressed that he would not let anyone impact the future of ZEEL or diminish the shareholder value it has been consistently generating over the years.
"Time to break silence"
Goenka said silence may be the best answer at times, but he quickly realised that in certain situations it is better to break it at the right time, so that truth comes to the fore.
"The key reason for me to present the series of communications exchanged with Invesco to the Board of Directors of ZEE, was to bring the truth out in the interest of all our stakeholders," he said, indicating that the questions he has raised and those by Invesco would be best answered by the judiciary.
"I acknowledge the stance that has been taken by Invesco, but communications pertaining to such proposals are always well-documented, and they speak to the contrary. I, too, have a lot of points to put across, but I firmly believe that there is a right time and place for it.
"My demeanour is not to indulge in an ill-natured fight. Such battles are best handled by legal experts. All I am contending for, is to preserve the future of this company, and not my position," he said.
Deal with Reliance, advanced by Invesco
Goenka said the deal negotiated with Reliance, which, however, could not be fructified, was advanced by Invesco, and later he presented the fact before ZEEL board to "bring the truth out in the interest of all our stakeholders".
He did not disclose further details saying the company's lawyers will do the needful in the court of law as deemed necessary.
On Wednesday, Invesco said it had tried to facilitate a possible deal between Reliance and the company, but refuted claims it had pushed for the transaction at a lower valuation.
The statement from Invesco came a day after Goenka told the company''s board that Invesco had come with a proposal in February for a merger with certain entities owned by a large Indian group (Strategic Group) with an inflated valuation "by at least Rs 10,000 crore".
Invesco, in its statement on Wednesday, mentioned that Reliance was the large Indian group. ZEEL, in its filing to the stock exchanges on Tuesday, had not disclosed the name of the group.
On Wednesday, Reliance Industries, in a statement, said Invesco had in February/March this year assisted in arranging discussions with Goenka. However, differences arose between Goenka and Invesco with respect to a requirement of the founding family for increasing their stake by subscribing to preferential warrants, it had said.
In his statement on Thursday, Goenka, while ackowledging the "extremely strong support" provided by Invesco, regretted that this "relationship going sour" and both are now facing "unfortunate circumstances".