The ZEE Board has denied Invesco Developing Market Funds and OFI Global China Fund, LLC’s request for an Extraordinary General Meeting (EGM), calling it “invalid and illegitimate.” In a letter dated October 1, 2021, Zee Entertainment Enterprises Ltd (ZEEL) informed the bourses of this.
The ZEE Board of Directors met on October 1, 2021, and came to the decision that the “requisition is illegitimate and illegal,” and has informed two of the main stakeholders of its inability to convene the EGM.
“The Board, comprised of seasoned experts, deliberated and debated different legal and statutory consequences of the requisition notice,” ZEE noted in its letter to the bourses.
The Board solicited the advice of independent lawyers and legal experts, including senior retired Supreme Court justices, and conducted a fair and transparent evaluation of the situation.”
The ZEE Board also stated that it had referred to various non-compliances under multiple laws, including the Securities and Exchange Board of India guidelines, the Ministry of Information and Broadcasting guidelines, and key clauses under the Companies Act and Competition Act, and had reached this decision after considering the interests of all stakeholders and stakeholders of the company.
As previously reported, Invesco Developing Market Funds and OFI Global China Fund, LLC, which together own 17.88% of ZEEL’s paid-up share capital, are demanding the removal of ZEE CEO and MD Punit Goenka, as well as two other corporate directors – Manish Chokhani and Ashok Kurien.
On September 13, 2021, a day before ZEE’s annual general meeting, Chokhani and Kurien resigned as Non-Executive Non-Independent Directors of the business.
The ZEE Board, on the other hand, has slammed the allegations leveled against Manish Chokhani and Ashok Kurien, both former non-executive directors, by some proxy advisory firms.
Meanwhile, Sony Pictures Networks India (SPNI) and ZEEL announced on September 22, 2021, that they have signed an exclusive, non-binding Term Sheet to integrate their linear networks, digital assets, production operations, and program libraries.
Punit Goenka, the present Managing Director and CEO of ZEEL, is expected to oversee the combined firm, with NP Singh, the MD, and CEO of Sony Pictures Networks India, serving on the combined entity’s Board of Directors.
Invesco and OFI repeated their call for an extraordinary general meeting (EGM) and addressed a second letter to the ZEE Board on September 23, 2021, amid the ZEE-Sony merger excitement.
Following this, Invesco and OFI approached the National Company Law Tribunal (NCLT) on September 29, 2021, requesting that it intervene in directing ZEE to hold the EGM. That day, the case number CP – 322/2021 was assigned.
The situation is anticipated to get murkier in the coming days, with ZEE digging in its heels and Invesco and OFI pressing for an EGM to remove Punit Goenka and nominate the six new independent directors requested by the two investors.
It remains to be seen how much the largest ZEE investors will be able to influence the ZEE-Sony merger arrangement.
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