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Tag: Invesco

  • Zeel-Invesco tussle: We have never resorted to any hostile transactions, says Reliance

    Zeel-Invesco tussle: We have never resorted to any hostile transactions, says Reliance

    Mumbai: Reliance Industries Ltd (RIL) has released a statement after being embroiled in the Zeel-Invesco dispute on Wednesday. The company said that it has never resorted to “hostile transactions” and noted that reports in the media are not accurate.

    Reliance Industries became entangled in the tussle between Zee Entertainment Enterprises Ltd (Zeel), and their investor Invesco Developing Markets Fund, after the latter revealed that Reliance was the “Strategic Group” that was looking to merge its media business with Zeel earlier this year in February-March.  

    As per the proposal, 40 per cent of the merged entity would belong to existing shareholders while 60 per cent would be controlled by RIL. Furthermore, the promoter family would retain its existing 3.99 per cent stake in the merged entity.

    According to the statement, Invesco assisted Reliance in arranging discussions directly between their representatives and Punit Goenka who is a member of the founding family and managing director of Zeel.

    Reliance had made a broad proposal for the merger of their media properties with Zeel. “The valuations of Zee and our media properties were arrived at based on the same parameters. The proposal sought to harness the strengths of all the merging entities and would have helped to create substantial value for all, including shareholders of Zee,” the company said.

    Reliance confirmed that the proposal included the continuation of managing director Punit Goenka and the issue of ESOPs to management including Goenka. “Reliance always endeavours to continue with the existing management of the investee companies and reward them for their performance,” it said.

    The fallout of the deal was attributed to differences between Goenka and Invesco with respect to a requirement of the founding family for increasing their stake by subscribing to preferential warrants. Invesco held the view that the founders could always increase their stake through market purchases.

    The Zeel-Invesco tussle began when the media company’s two top investors Invesco Developing Markets Fund and OFI Global China Fund LLC who combined own 18 per cent stake in the company had sent a requisition notice to the company on 11 September to call an EGM even after two weeks, the investors moved to NCLT, citing provisions of Company Law, according to which the company is bound to call for an EGM within a specific number of days if stakeholder demanding it owns more than 10 per cent of the company.

    The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations. 

    The investors moved to have six nominees appointed to the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepali, and Gaurav Mehta as independent directors of the board for a term up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to approval by the ministry of information and broadcasting (I&B).

    Zeel refused to conduct the EGM citing ‘shareholders interest,’ and moved to Bombay high court on 2 October seeking to declare the requisition notice as “illegal and invalid.”

    On 22 September, Zeel and Sony Pictures Networks India announced that they have signed a non-binding term sheet to merge the media assets of both companies. However, Invesco has raised concerns regarding aspects of the deal that allow the promoter family to increase their stake from 3.99 per cent to 20 per cent and has demanded that additional details of the proposed merger be furnished.

  • Zee-Invesco tussle: Bombay HC gives Invesco time till 20 Oct to file reply

    Zee-Invesco tussle: Bombay HC gives Invesco time till 20 Oct to file reply

    Mumbai: The Bombay high court on Wednesday heard the petition filed by Zee Entertainment Enterprises Ltd (Zeel) against the requisition notice sent by its investor Invesco Developing Markets Fund. The court has asked Invesco to file its reply by 20 October and will hear the matter on 21 October.

    National Company Law Tribunal (NCLT) has given Zeel time until 22 October to file its reply to Invesco’s requisition plea after a hearing on 8 October.

    Zeel’s two top investors Invesco Developing Markets Fund and OFI Global China Fund LLC who combined own 18 per cent stake in the company had sent a requisition notice to the company on 11 September to call an EGM even after two weeks, the investors moved to NCLT, citing provisions of Company Law, according to which the company is bound to call for an EGM within a specific number of days if stakeholder demanding it owns more than 10 per cent of the company.

    The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations. 

    The investors moved to have six nominees appointed to the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepali, and Gaurav Mehta as independent directors of the board for a term up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to approval by the ministry of information and broadcasting (I&B).

    Zeel refused to conduct the EGM citing ‘shareholders interest,’ and moved to Bombay high court on 2 October seeking to declare the requisition notice as ‘illegal and invalid.’

  • Reliance had courted Zeel for media business transaction, says Invesco

    Reliance had courted Zeel for media business transaction, says Invesco

    Mumbai: Invesco Developing Markets Fund on Wednesday stated that Reliance Industries had made an offer to Zee Entertainment Enterprises Ltd (Zeel) to merge its media business, a deal which was struck down by Zeel’s managing director and chief executive officer Punit Goenka at the beginning of the year.

    According to a statement by the investor, “the potential transaction proposed by Reliance (the ‘Strategic Group’ referenced but not disclosed in the 12 October communication by Zeel) was negotiated by and between Reliance and Goenka and others associated with Zeel’s promoter family. The role of Invesco, as Zeel’s single largest shareholder, was to help facilitate that potential transaction and nothing more.”

    Invesco rejected Zeel’s assertion in the 12 October release that the former would seek out a transaction for Zeel that is dilutive to the long-term interests of ordinary shareholders, including Invesco itself, saying that it “simply defies logic.”

    A filing with the Bombay Stock Exchange on Tuesday showed that Goenka shared a note with Zeel’s board that detailed a proposed transaction under which the company’s current shareholders would have held 40 per cent while an unnamed (Strategic Group) Indian group, would have controlled 60 per cent after infusing Rs 14,000 crore cash in the merged entity.

    Goenka disclosed that as part of the Reliance deal, he would have continued as the managing director and chief executive officer of the merged entity and the promoter group of Zeel would be given 3.99 per cent shareholding of the merged entity. Goenka was also offered employee stock options (ESOPs) representing up to four per cent of the shareholding of the merged entity meaning that the promoter group would hold up to seven to eight per cent stake in the merged entity. 

  • Invesco offered a merger proposal with a ‘large Indian group’ in Feb, says Zeel MD Punit Goenka

    Invesco offered a merger proposal with a ‘large Indian group’ in Feb, says Zeel MD Punit Goenka

    New Delhi: In a major development, Zee Entertainment Enterprises Ltd (Zeel) MD Punit Goenka has informed the Company Board that Invesco representatives had covertly offered a merger proposal to him with a “large Indian group” in February, early this year.

    The “deal” involving the merger of the Company and certain entities owned by a large Indian group (Strategic Group) was presented by Invesco’s representatives Aroon Balani and Bhavtosh Vajpayee, the Zeel MD told the Board in a note. According to the deal, upon completion of the merger, the Strategic Group would have held a majority stake in the merged entity and Goenka would have been appointed as the MD & CEO. Through several correspondents, Invesco even “acknowledged Goenka’s reputation, experience, and capabilities as a professional and insisted that he would be paramount in leading the operations and business of the merged entity,” wrote Goenka.

    The Zeel MD also told the Board that as per the deal, the merging entities of the Strategic Group were over-valued, and it would have resulted in a loss to the stakeholders of the Company. “If the proposed deal would have been approved, the shareholders of the Company would have suffered a loss of at least Rs 10,000 crore,” claimed Goenka.

    But, when he expressed his apprehensions regarding the deal, “Invesco told him that they had already finalised the key commercial terms of the merger with the Strategic Group and there was no room to negotiate or even diligence the entities to be merged or the valuations of those entities,” he wrote. “In fact, I was asked to ensure that the Company consummates the deal within a period of just five days!”

    The promoter group of the Company was being offered 3.99 per cent shareholding of the Merged Entity, and Goenka was further offered employee stock options (ESOPs) (with no vesting conditions), representing approx. four per cent of the shareholding of the Merged Entity. Accordingly, the existing promoter group of the Company along with Goenka would have held up to eight per cent in the Merged Entity.

    Goenka maintained that the latest turn of events, confirms that Invesco is blatantly trying to take de-facto control of the Company without adhering to any take over regulations.

    The letter comes in the backdrop of the intense board room tussle that the Company has been facing, with the two investors- Invesco Developing Markets Fund and OFI Global China Fund LLC Invesco who together hold an 18 per cent stake demanding an extraordinary general meeting (EGM) to remove Goenka as MD. However, the latest move by Goenka has raised further questions over the motives behind the investors’ persistent calls for an EGM.

    Last week, Invesco wrote a biting Open letter stating how they have been in talks with Zeel’s management for over two years, regarding the “repeated governance failures” and “underperformance” of the Company. The letter signed by Invesco’s chief investment officer Justin M. Leverenz even termed the Sony-Zeel merger as a “camouflage to distract from the primary issue before the company.”

    Goenka highlighted that Invesco’s stance in their Open Letter sent on 11 October that they “will oppose any strategic deal structure that unfairly rewards select shareholders, such as the promoter family, at the expense of ordinary shareholders,” runs contrary to the very deal Invesco was proposing itself a few months ago. Accordingly, public securities markets have been misinformed by Invesco, he maintained.

    The Company Board discussed Goenka’s letter on Tuesday, and concluded, that “Invesco’s actions over the past few weeks, have been motivated by circumstances that are extraneous to the Company’s business or performance, or issues of corporate governance or the public interest.” The Board added that it will separately respond to certain unjustified comments made in the Open Letter.

  • Zee-Sony merger no more than camouflage to distract from primary issue: Invesco

    Zee-Sony merger no more than camouflage to distract from primary issue: Invesco

    Mumbai: Invesco Developing Markets Fund has written a biting open letter addressed to the shareholders of Zee Entertainment Enterprises Ltd (Zeel). The investor has raised concerns regarding the “repeated governance failures” and “underperformance” of the company and has claimed that the timing of the announcement of an alignment with Sony Pictures Networks India (SPNI) is a camouflage to distract from the primary issue before the company.

    The letter is signed by Invesco’s chief investment officer Justin M Leverenz.

    It states that the investor has been in talks with Zeel’s management for over two years and has shared suggestions on matters including disclosures, capital allocation, ring-fencing, and distancing Zeel from the long shadow of another family “group companies.” However, the outcome of these discussions has “yielded nothing other than platitudes such as Zee 4.0.”

    The investor observed that Zeel’s stock price increased by 40 per cent after it called for an extraordinary general meeting of shareholders. “The purpose of this action – unique in the almost 25-year history of our fund – is to enable all shareholders to vote on the proposed removal of the remaining non-independent director and to add six additional independent directors to the board,” it said.

    The increase in stock price after our intentions became public demonstrates the frustration of Zeel’s long-suffering investors and the appetite for change, claimed Invesco. Invesco pointed out that the Indian stock market indices have more than doubled in the preceding five years, whereas the stock of Zeel had more than halved in the same period.

    Invesco highlighted the urgent need for independent perspectives on Zeel’s board citing the company’s governance failures and prolonged underperformance. The EGM would hold the board and management of Zeel accountable for the past performance of the company, it said.

    According to the investor, the lack of governance oversight by Zeel’s current board was identified in the Securities and Exchange Board of India (SEBI) letter dated 17 June. The letter highlighted several aspects pertaining to Zeel including “large outstanding dues from related parties,” “letters of comfort issued by directors of the company without informing the board,” and based these and other observations concluded that the “actions of the company are not in the best interest of shareholders.”

    Invesco also expressed its concerns over Zeel’s proposed alignment with Sony, which it noted, “favours the founding family at the expense of shareholders.”

    It said, “This non-binding agreement gifts a two per cent equity stake to the promoters of Zee in the guise of a ‘non-compete,’ even though the current managing director and chief executive officer of Zee will continue to run the proposed merged entity for the next five years. This is dilutive to all other shareholders, which we consider unfair. At the very least, we would expect such largess to be contingent on the MD/CEO leaving said position (thus raising the scenario of ‘non-compete’) or be structured in the form of time vesting and performance-linked ESOPs, which we as shareholders welcome as a transparent way to reward performance and leadership.”

    It added, “The Zee-Sony announcement casually mentions that the Zee promoter family will have the right to raise their stake from four per cent to 20 per cent, without specifying any manner in which this meaningful change will actually happen. Will this change the majority control of Sony in the merged entity? Will it involve open market purchases, warrants, or some other financial instrument? If the latter, will say instruments/warrants to the promoter family be priced so as to advantage them at the cost of ordinary shareholders? This lack of clarity around key aspects of the Zee-Sony announcement should concern all shareholders.”

    Invesco stated that they would view the transaction in a constructive spirit “if and when” additional information regarding the proposed merger is made available.

    Zeel two top investors Invesco and OFI Global China Fund LLC who combined own 18 per cent stake in the company had sent a requisition notice to Zeel on 11 September to call an EGM even after two weeks, the investors moved to NCLT, citing provisions of Company Law, according to which the company is bound to call for an EGM within a specific number of days if stakeholder demanding it owns more than 10 per cent of the company.

    The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations.

    The investors moved to have six nominees appointed to the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepali, and Gaurav Mehta as independent directors of the board for a term up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to approval by the ministry of information and broadcasting (I&B).

    Zeel refused to conduct the EGM citing “shareholders interest,” and moved to Bombay high court on 2 October seeking to declare the requisition notice as “illegal and invalid.”

    “These actions, which ostensibly are being taken in the ‘best interests of all shareholders,’ as Zee’s communications claim, are in fact indicative of a management team that places self-interest over the interest of the institution it leads, its employees and all other shareholders, as well as a Board whose permissive culture has enabled this behaviour and its consequences,” said Invesco.

    Invesco stated that it will exercise its right to conduct an EGM and if the proposal moved at the meeting finds favour from the shareholders so as to carry the vote, then six new independent directors will join the board of Zeel and the sitting managing director and chief executive officer of the company Punit Goenka will be removed from the board.

    The newly constituted board will deliberate and determine the future leadership of the company, including the appointment of an interim CEO, while the formal search for a CEO within the management of the company or from within the Indian media industry is conducted.

    “We wish to clarify the issues on which we will not compromise in connection with any transaction, and where we will continue to make our voice and our vote heard. We will firmly oppose any strategic deal structure that unfairly rewards select shareholders, such as the promoter family, at the expense of ordinary shareholders,” it concluded.

  • NCLT gives Zeel time till 22 Oct to file reply to Invesco plea

    NCLT gives Zeel time till 22 Oct to file reply to Invesco plea

    Mumbai: The National Company Law Tribunal (NCLT) on Friday gave Zee Entertainment Enterprises Ltd (Zeel) time till 22 October to file its reply to a plea by its shareholder, according to a report by PTI. The decision was taken after the company approached National Company Law Appellate Tribunal (NCLAT) which declared that ‘reasonable and sufficient opportunity’ should be given to Zeel to respond to the investor’s plea.

    Zeel had approached the appellate body challenging the NCLT order dated 5 October which asked the company to submit its reply to the investor’s demand for calling an extraordinary general meeting (EGM) by Thursday.

    The NCLT hearing had been deferred to Friday after the NCLAT reserved its order on the plea until later in the evening on Thursday.

    Zeel two top investors Invesco Developing Markets Fund and OFI Global China Fund LLC who combined own 18 per cent stake in the company had sent a requisition notice to Zeel on 11 September to call an EGM even after two weeks, the investors moved to NCLT, citing provisions of Company Law, according to which the company is bound to call for an EGM within a specific number of days, if stakeholder demanding it owns more than 10 per cent of the company.

    The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations.  

    The investors moved to have six nominees appointed to the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srnivasa Rao Addepali and Gaurav Mehta as independent directors of the board for a term up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to approval by the ministry of information and broadcasting (I&B).

    Last week, Zeel refused to conduct the EGM citing ‘shareholders interest,’ and moved to Bombay high court seeking to declare the requisition notice as ‘illegal and invalid.’

  • Zeel must get ‘reasonable time’ to reply to investors plea: NCLAT passes order

    Zeel must get ‘reasonable time’ to reply to investors plea: NCLAT passes order

    New Delhi: Zee Entertainment Enterprises Ltd (Zeel) should be given a “reasonable and sufficient opportunity” time to respond to the investors’ plea filed before the National Company Law Tribunal (NCLT), said the National Company Law Appellate Tribunal (NCLAT) on Thursday.

    Zeel had approached the Appellate authority, challenging NCLT’s order which asked the Company to submit its reply to the investors’ demand for calling an extraordinary general meeting (EGM) by Thursday, when its next hearing was scheduled.

    The appellate tribunal stated that NCLT had made an “error” by not granting Zeel “reasonable and sufficient time for filing a reply…. This was a complete violation of NCLT Rules and Principles of Natural Justice,” said the two-member bench of the NCLAT and asked NCLT to proceed after hearing both parties. “We are of the opinion that reasonable and sufficient opportunity should be given to the appellants for filing a reply.”

    The Appellate Tribunal also mentioned that “Section 98 of the Companies Act does not prescribe any limit and limitation on the learned NCLT to pass order within that time limit.” However, it did not mention the amount of time that should be granted to the media conglomerate. 

    Meanwhile, NCLT had deferred the hearing of the Zeel-Invesco case to Friday, citing the plea pending before the NCLAT.

    Zeel spokesperson said that the company continues to have full faith in the Indian judicial system and will take all the necessary steps that are in the best interests of all its shareholders.  

    Zeel’s top two investors Invesco Developing Markets Fund and OFI Global China Fund LLC who together hold an 18 per cent stake had sent a requisition notice to Zeel on 11 September to call an EGM and discuss the removal of MD Punit Goenka. When Zeel did not announce the date of the EGM even after two weeks, the investors moved NCLT, citing provisions of the Company Law, according to which the Company is bound to call an EGM within a specific number of days, if the stakeholder demanding it owns more than 10 per cent stake in the Company.

    The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the Board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations.

    The investors had also sought the appointment of their own six nominees on the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, Gaurav Mehta as independent directors on the board for a term of up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to the approval of the ministry of information and broadcasting (I&B).

    Last week, Zeel Board refused to conduct the extraordinary general meeting (EGM) citing ‘shareholders interest’, and moved the Bombay high court seeking to declare the requisition notice as “illegal and invalid”.

  • NCLAT reserves orders on Zeel’s appeal

    NCLAT reserves orders on Zeel’s appeal

    Mumbai: The National Company Law Appellate Tribunal (NCLAT) on Thursday reserved orders on an appeal moved by Zee Entertainment Enterprises Ltd (Zeel). The company had challenged the 5 October order by the National Company Law Tribunal (NCLT) on the matter of requisition for an Extraordinary General Meeting (EGM). The requisition notice was moved by top investors at Zeel including Invesco Developing Markets Fund and OFI Global China Fund IIC. 

    Meanwhile, the NCLT which was slated to take up the application for an EGM on Thursday at 2:30 p.m, has decided to adjourn the hearing until 2:30 p.m on Friday after hearing that NCLAT had reserved its order.

    On 5 October, the NCLT had given Zeel two days to file its counter-affidavit to the applications before it. The bench had declined to give more time to file this response opining that it was a simple matter that did not need weeks for a reply to be filed. This order was challenged by Zeel before the NCLAT.

    The NCLAT bench has informed that the order on Zeel’s appeal would be pronounced and issued later on Thursday. The bench said that they would not be deciding the case on merits, but would peruse all NCLT orders passed in the matter to take a call on Zeel’s appeal, according to a report by Bar and Bench.

    Counsel for Zeel argued that the case before NCLT was only at an interim stage and was converted into a final hearing without giving the company suitable time to respond. Counsel for Invesco argued that there was no distinction between interim relief and final relief in the present case and that “the appeal should be rejected at all costs as it is an abuse of process of court,” according to Bar and Bench.

    Zeel’s boardroom tussle began on 11 September, when the company’s top two investors – Invesco and OFI China Fund IIC which together hold an 18 per cent stake in the media company, sent it a requisition notice calling for an EGM of shareholders. The investors sought the removal of Zee’s sitting managing director Punit Goenka and two independent directors Ashok Kurien and Manish Chokhani. The two independent directors had submitted their resignations a day prior. The investors had also sought the appointment of their own six nominees on the board of Zeel.

    Zeel had challenged the requisition notice stating that it is “invalid and illegal” and had moved to the NCLAT for a hearing.

  • Clandestine attempt to take over Zeel, says Subhash Chandra on Invesco’s notice

    Clandestine attempt to take over Zeel, says Subhash Chandra on Invesco’s notice

    New Delhi: As the boardroom tussle between Zee Entertainment Enterprises Ltd (Zeel) and its investors rages on, Essel group chairman Subhash Chandra who founded Zee TV said the latest move by its US-based investors is a “clandestine attempt to take over the Company”.

    “They (Invesco) has taken a hideous route to oust the current leadership. It is nothing, but an attempt to take over the Company in an illegal manner. This is not permitted under any of our (Indians) laws. They need to come clean on their exact motives. They need to be transparent, which they are not,” said Chandra on Wednesday, during an interview aired on Zee News.

    Chandra founded Zee TV in 1992 and reminisced the journey that the media and entertainment network has traversed over the last three decades. “In those days, our role was mainly that of a public broadcaster, creating awareness, and then slowly we evolved and provided family entertainment to masses. Today, the Zee channels are watched by crores of Indians, who consider Zeel as part of their family. It is not just any other business,” said the media veteran.

    Talking about the calls for removal of the Company’s MD and CEO Punit Goenka, Chandra said the Board and shareholders had placed their trust in him, and announced him as the MD, and any decision on the leadership rests with them. “Zeel is not owned by any one individual or investor,” emphasised Chandra. “It is owned by over 2.5 lakh shareholders who are part of its family. They are the real owners. The Board is also independent.”

    Zeel has been battling a boardroom crisis ever since, its two investors – the US-based Invesco Developing Markets Fund and OFI Global China Fund IIC who together hold an 18 per cent stake in the media company called for the removal of MD and CEO Punit Goenka. The investors had sent a requisition notice to the Board on 11 September demanding an extraordinary general meeting (EGM).

    They had also sought the removal of long-standing directors and close associates of the Chandra family from the Board, including two independent directors Ashok Kurien and Manish Chokhani, and suggested a few names of their own. Both had submitted their resignations a day prior. Meanwhile, the new appointments are yet to be approved by the ministry of information and broadcasting (I&B).

    “Such tactics (of Invesco) must draw the attention of the government and Securities Exchange Board of India (SEBI) who should consider taking action against them,” said the Zee TV founder, highlighting that Invesco has not been transparent about their future course of action, especially after their proposed removal of Goenka as MD. “No ship can sail out in the sea without a captain, and no Company can function even a day without a sitting MD.”

    While Invesco remains adamant on the EGM, Zeel too is defending the company with equal vigour. On Wednesday, the company moved the National Company Law Appellate Tribunal (NCLAT) against the order passed by National Company Law Tribunal (NCLT) to submit its reply to the investors’ demand for an EGM. The media and entertainment company has also moved the Bombay high court seeking to declare the requisition as “illegal and invalid.”

    “The Board is independent, and it has taken the decision based on the counsel of their senior legal experts. If Invesco wants to take over the Company through such hideous routes, then, the Company will not let that happen,” he summed up.

  • Zeel-Invesco Tussle: After Bombay HC, Zeel now approaches NCLAT

    Zeel-Invesco Tussle: After Bombay HC, Zeel now approaches NCLAT

    New Delhi: Media and entertainment giant Zee Entertainment Enterprises Ltd (Zeel) has now approached the National Company Law Appellate Tribunal (NCLAT) against the order passed by National Company Law Tribunal (NCLT) on Tuesday. The Tribunal had asked the Company to submit its response to the investors demand for calling an extraordinary general meeting (EGM).

    “The Company has moved to National Company Law Appellate Tribunal (NCLAT) in accordance with the due process available under the law,” said ZEEL spokesperson.  The next hearing in the NCLT is on Thursday.

    The development comes few days after Zeel filed a petition in the Bombay high court seeking to declare the requisition notice sent by Invesco Developing Markets Fund and OFI Global China Fund LLC as “invalid”. “The Company continues to have full faith in the Indian judicial system and will take all the necessary steps that are in the best interests of all its shareholders,” the statement added.

    The Zeel boardroom tussle began on 11 September, when the Company’s top two investors- Invesco and OFI Global China Fund IIC which together hold an 18 per cent stake in the media company sent it a requisition notice calling for an EGM of the shareholders. The investors have sought the removal of Zeel’s sitting MD Punit Goenka, and long-standing directors and close associates of the Chandra family from the Board. The two independent directors Ashok Kurien and Manish Chokhani had submitted their resignations a day prior. Meanwhile, the

    The investors had also sought the appointment of their own six nominees on the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, Gaurav Mehta as independent directors on the board for a term of up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to the approval of the ministry of information and broadcasting (I&B).

    However, Zeel refused to conduct the extraordinary general meeting (EGM), stating that the requisition notice was “illegal and invalid”. The Company further maintained that it will continue to take all the actions needed in the interest of the shareholders as per law. “The Board has arrived at this decision by referring to various non-compliances under multiple laws, including the Securities and Exchange Board of India guidelines, ministry of information and broadcasting guidelines, and key clauses under the Companies Act, and Competition Act, and after taking into account the interest of all the stakeholders of the company,” Zeel had said in a statement.

    Meanwhile, on September 22, ZEEL also announced its proposed merger with Sony Pictures Networks India (SPNI) which will create the country’s largest media company. The merged entity, in which SPNI’s parent company SPNI would infuse $1.575 billion, will be a public listed company in India. Punit Goenka was announced as the CEO and managing director of the new entity, with the promoter family being free to increase its holding from four per cent to 20 per cent over time.