Mumbai: A day after refusing to convene an extraordinary general meeting (EGM) based on a requisition of its largest investors, Invesco Developing Markets Fund, along with OFI Global China Fund, both foreign funds, Zee Entertainment Enterprises (ZEE) has moved the Bombay High Court terming the demand as “illegal and invalid”.
The suit filed by ZEE, on Saturday, has prayed that the HC declare the requisition notice sent by Invesco and OFI Global China Fund as illegal and invalid.
On Friday, ZEE had announced that its board has rejected the request of shareholders, Invesco and OFI Global China Fund, to convene an EGM to discuss various issues, including removal of Managing Director Punit Goenka.
According to ZEE, the appointment of new independent directors, as proposed by Invesco in the requisition notice, is subject to prior approval from the Ministry of Information and Broadcasting.
On September 30, the National Company Law Tribunal (NCLT) at Mumbai had directed the Board of Directors (BoD) of Zee Entertainment Enterprises (ZEE) to consider requisition made by the company’s largest investor to hold an extraordinary general meeting (EGM) by October 3. A bench of Bhaskara Pantula Mohan and CB Singh said, “We direct respondents (ZEE) to consider requisition made by the petitioners (Invesco) under the Companies Act positively and comply with section 100 of Companies Act.”
The tribunal was hearing an application filed by the shareholders to hold an EGM and consider removal of MD & CEO Punit Goenka and two other non-independent non-executive directors from the company’s board and induction of six new independent directors.
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. The NCLT is slated to hear Invesco’s plea on October 4.
What is the fracas about
In September, Invesco, and OFI Global China Fund called for an extraordinary general meeting of shareholders seeking to remove Punit Goenka as director of the firm,
Goenka, son of Essel Group founder and chairman Subhash Chandra, is managing director and chief executive officer of ZEEL.
"The board of directors of the company is requested to take all necessary action to call for and conduct the extraordinary general meeting, as requisitioned by us, in accordance with applicable law… ," the two investment firms said in a letter, which was uploaded by the company on the bourses.
In a stock exchange filing, Zee Entertainment Enterprises said that Invesco and OGI Global have recommended appointing six independent directors to the board of the company--Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli and Gaurav Mehta.
Besides Goenka, Invesco and OFI Global sought the removal of Manish Chokhani and Ashok Kurien as directors of the company. .
In a separate filing, ZEEL also informed that both independent board members Chokhani and Kurien has resigned from the board on Monday evening.
"The Company has ....received letters from Manish Chokhani and Ashok Kurien resigning from the position of Non-Executive Non-Independent Directors of the Company with immediate effect," ZEEL said in a regulatory filing.
Invesco and OFI Global China also enclosed the relevant declarations and information required from each of the proposed Independent Directors, which is required while seeking approval from the Ministry of Information and Broadcasting (MIB) while making changes.
"Accordingly, we request that the company submit an application with the MIB seeking approval for the appointment of the Proposed Independent Directors at the earliest," the investment firms said.
In July 2019, Subhash Chandra-led Essel Group had roped in existing investor Invesco Oppenheimer to raise its stake in flagship Zee Entertainment Enterprises by another 11 per cent for Rs 4,224 crore.
As of June 2021 quarter, the promoter shareholding in the company stood at 3.99 per cent.
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