In a relief for Zee Entertainment Enterprises (ZEE), the Bombay High Court granted injunction to the media company against calling extra-ordinary general meeting (EGM) as requisitioned by its largest investors – Invesco Developing Markets Fund and OFI Global China Fund – for removal of its managing Director and Chief Executive Officer Punit Goenka.
On Tuesday, justice Gautam Patel temporarily restrained Invesco and OFI Global from exercising rights basis requisition and calling any EGM.
“I have granted the injunction with no costs,” said Justice Gautam Patel while granting relief to ZEE in its interim application. A detailed order will be uploaded later.
ZEE had filed a suit before the HC seeking to declare the requisition notice sent by Invesco and OFI Global China Fund be declared as is “illegal and invalid”. Pending hearing in the suit, ZEE had filed an application seeking that Invesco be restrained from calling an EGM.
Invesco and OFI Global had sent a requisition to the company on September 11 to call for an EGM for 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 the media company failed to respond, Invesco approached the National Company Law Tribunal (NCLT) seeking that ZEE be directed to call an EGM as per their requisition.
Pending this, the ZEE approached the HC seeking to declare the requisition as illegal.
ZEE’s counsels Gopal Subramanium, Navroz Seervai and Prateek Seksaria had contended that if the Board of Directors of ZEE were compelled to call and EGM as per the requisition then it would be violative of other provisions of laws.
Senior counsel Subramanium had argued that matter for consideration (during an EGM) should be valid and legal and that there is no concept of an independent director being directly proposed.
“There should be a public offer if there is a change in control of the board. Also, prior permission from the Ministry of Information and Broadcasting is required before effecting any change to the board,” Subramanium had argued.
Invesco-OFI had contended that as per the provisions of the Companies Act, the media company was bound to call an EGM as per the requisition.
However, Subramanium pointed out Section 100 of the Companies Act which contemplates the refusal by the Board to act on the requisition.
ZEE’s suit will come up for final hearing in due course of time.
