The Bombay High Court has directed Invesco Developing Markets Fund and OFI Global China Fund – largest investors of Zee Entertain Enterprises (ZEE) to file its reply to the entertainment company’s plea challenging their requisition for calling of an extraordinary general meeting (EGM).
Justice Gautam Patel, on Wednesday, directed Invesco-OFI to file their reply by October 20 and kept the matter for hearing on October 21, a day before the National Company Law Tribunal (NCLT) is slated to hear the investors’ plea.
ZEE had filed a suit seeking that the HC declare the requisition notice sent by Invesco and OFI Global China Fund be declared as is “illegal and invalid”.
The court questioned OFI’s counsel Janak Dwarkadas as to why they had moved the NCLT before the expiration of 21 days. As per the mandate, the Board of Directors (BoD) has to decide within 21 days of receiving requisition for calling an AGM and the same has to then be called within 45 days thereafter.
Dwarkadas said that their plea is pending before the NCLT and before filing its reply, the applicant (ZEE) approached the National Company Law Appellate Tribunal (NCLAT) and the HC.
“It is my statutory right to call for an EGM,” said Dwarkadas adding that they (ZEE) could not question the validity of the requisition.
Justice Patel asked senior counsel Gopal Subramaniam, appearing for ZEE, “If the matter is before the NCLT then why should I hear the matter today? What if NCLT refuses Mr Dwarkadas’ application….”
Subramanium said that the suit questions the validity of the requisition of an EGM. “Suit questions the validity of the requisition of calling of an EGM. The question is whether the NCLT can decide on this?” said Subramanium.
Seervai, senior counsel for the ZEE, pointed out to the court that at the preliminary stage of the hearing for granting interim relief, the NCLT was deciding on the final relief without giving them reasonable time to file their reply.
Justice Patel then asked Invesco and OFI to file their replies by October 20.
On September 11, Invesco-OFI had sent a requisition to ZEE to call for an EGM removal of MD and CEO Punit Goenka and two other non-independent and non-executive directors from the company’s board. It also sought the induction of six new independent directors.
As ZEE failed to call the EGM, Invesco-OFI had approached the NCLT on September 29, seeking that ZEE be directed to hold an EGM as per the requisition.
On October 1, ZEE announced that they have rejected Invesco-OFI’s requisition for calling of an EGM. The same day, ZEE filed a suit in the HC challenging the requisition terming the demand as “illegal and invalid”.
The promoters, including Goenka, hold 3.99 per cent of the shares in the company. The remaining 96.01 percent of the shares are held by the public of which the two petitioners, together, hold 18 percent shares in ZEE.
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