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Tag: Punit Goenka

  • 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.

  • 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.

  • 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.’

  • 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. 

  • Zeel-Invesco Tussle: Mandatory for Zeel to call an EGM, Invesco tells NCLT

    Zeel-Invesco Tussle: Mandatory for Zeel to call an EGM, Invesco tells NCLT

    New Delhi: The Boardroom tussle between Zee Entertainment Enterprises Ltd (Zeel) and its top investor Invesco Developing Markets Fund shows no signs of slowing down. On Monday, Invesco argued its case before the National Company Law Tribunal (NCLT) urging the media and entertainment company to schedule an extraordinary general meeting (EGM) as per law.

    Under relevant sections of the Companies Act, it is a mandatory duty of Zeel to honour the request of EGM if so demanded by shareholders who own more than 10 per cent of stake in the Company, said senior advocate Mukul Rohtagi appearing on behalf of Invesco. “The EGM should be called within 21 days,” he emphasised, as reported by moneycontrol.com

    Rohtagi urged the Tribunal to direct Zeel to convene the EGM under the chairmanship of a retired Supreme Court/high court judge, highlighting that it is not concerned about the outcome of the EGM, but about the EGM being called. “It is for the shareholders to decide on the requisition and not them (ZEE) or anybody else,” he told NCLT.

    Last week, Zeel had convened its inability to convene the meeting to the investors. “The Board comprising of experienced professionals deliberated and discussed various legal and statutory implications of the requisition notice. It also sought the opinions of independent counsel, legal experts including retired SC judges, and evaluated the matter in a fair and transparent manner,” Zeel had said in a statement. The Company has now moved the Bombay high court, seeking court’s intervention in declaring the requisition notice as “illegal and invalid”.

    Invesco and OFI Global China Fund IIC together hold an 18 per cent stake in the media company. The investors had sent a special notice to Zeel on 11 September calling for an EGM of the shareholders seeking removal of its 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.

    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).

    The matter is now listed for hearing on Tuesday.

  • Zeel completes 29 years; the best is yet to come, says MD Punit Goenka

    Zeel completes 29 years; the best is yet to come, says MD Punit Goenka

    Mumbai: The media and entertainment major – Zee Entertainment Enterprises Ltd (Zeel) has completed 29 years of its foundation on Saturday, as it wades through a boardroom crisis.

    “29 years ago, on this very day, we set pen to paper and laid the foundation of this extraordinary institution, which we called ZEE. Back then, a lot of people thought it was a bold and impossible idea, but the power of passion and perseverance paid off and here we are today, celebrating this glorious milestone,” said managing director and chief executive officer Punit Goenka in a message to his employees. “It has been a journey where we embedded culture of consistent value creation and sustained growth. As we together step into the 30th year of the Company, we stay committed to many more successful years ahead filled with glory, growth, and profitability.”

    Goenka said “the best is yet to come,” as the company now gears up to seal a merger deal with Sony Pictures Network India (SPNI). “The proposed merger with Sony will make us the largest media and entertainment company in the country. With Sony as a partner in our value creation journey, the combined synergies will help us strengthen our capabilities, and create sharper content that enriches the lives of our viewers,” said Goenka.

    The Company is currently embroiled in a boardroom tussle with two of its top investors demanding the removal of MD and CEO Punit Goenka through an extraordinary general meeting (EGM). The demand made through a requisition notice has already been turned down by the Company, which is also exploring legal options against the move.

  • IAA India president Megha Tata set for second term

    IAA India president Megha Tata set for second term

    Mumbai: The India chapter of the International Advertising Association (IAA) has unanimously re-elected Discovery Communications India-South Asia MD Megha Tata as president of the body. Tata, therefore, will be returned for the second term, announced IAA at its AGM held here on Friday.

    “It is an honour and a privilege to be leading the India chapter of IAA for the second term,” said Tata. “Along with the wonderful Mancom I hope to continue to strengthen the India chapter and help build a strong ecosystem for the common good of the industry.”

    “In spite of a challenging year, we did many successful events, and am sure the coming year will be even bigger and better,” she added.

    Eros International Media group CEO & executive director Pradeep Dwivedi was elected as vice president and the other office-bearers include Lodestar UM CEO Nandini as honorary secretary and The Free Press Journal director Abhishek Karnani as honorary treasurer.

    Zee Entertainment Enterprises Ltd MD and CEO Punit Goenka will continue to guide the new team as immediate past president, said the association in a statement.

    The members of the managing committee elected include Another Idea founder Jaideep Gandhi; The Indian Express Pvt Ltd executive director Anant Goenka; ABP Network CEO Avinash Pandey; Deshdoot Media Group managing director Janak Sarda, and GroupM CEO-South Asia Prasanth Kumar.

    The co-opted members are Havas Group India CEO Rana Barua; Dentsu Aegis Network CEO-APAC and chairman India Ashish Bhasin; Marketing Amar Ujala Publications president Rajiv Kental; Indira Television Ltd director Rani Reddy, and RK Swamy Hansa and IAA Presidents’ Council chairman and IAA Global immediate past chairman & world president Hansa Srinivasan K Swamy.

    The members invited to the managing committee will be shortly announced.

  • Zee-Sony entity to generate close to $2 billion in revenue

    Zee-Sony entity to generate close to $2 billion in revenue

    Mumbai: Zee Entertainment Enterprises Ltd (Zeel) on 22 September announced its plans for a merger with Sony Pictures Networks India (SPNI). The merged entity will be the largest media and entertainment player in India with a scale close to $ two billion in revenue.

    In an investor call on Wednesday, Punit Goenka, who has been proposed as the managing director and chief executive officer of the merged entity for a period of five years, stated that “the primary objective will be growth for the company overall. Whether that will be for the digital or sports business that the new board of the merged company will decide,” according to a report by Moneycontrol.

    The merger was unanimously approved by the Zeel Board in a meeting held on Tuesday, where it evaluated the agreement on the financial parameters as well as the strategic value which SPNI brings to the table.

    “Condition for my appointment is the same as what has already been approved by the shareholders. There is no change to that. Any change in remuneration would be subject to board approval,” said Goenka.

    The companies have inked a non-binding term sheet that gives them 90 days to conduct mutual due diligence and come to an agreement that will also require shareholder approval. Post that the scheme will be presented to National Company Law Tribunal (NCLT) and Securities and Exchange Board of India (SEBI). Zeel noted that the Competition Commission of India (CCI) approval is also part of the process.

    According to Goenka, while CCI norms are different for different sectors, in this scenario, it will be a national-level evaluation and not a state-level evaluation. “The deal has been arrived at with Sony after months of negotiation and preparation. And I think we have a formidable real deal on the table today.”

    Sony has agreed to infuse $1.6 billion cash which will enable the merged entity to accelerate its digital platform and significantly invest in premium content including sports. Zeel had sold the Ten Sports franchise to Sony five years ago which will now become a part of the merged entity.

    On the matter of channel rationalisation, Goenka said that it will happen at a later date as each channel has its own unique viewership as well as programming. “The focus will be on maximising reach and viewership. Overlaps are there in Hindi-speaking markets of GEC and movies. But the content that exists on the platforms is unique and exclusive. So, the objective will be to maximise viewership and garner revenue rather than shutting down channels,” he added.

    The company has yet to reach out to shareholders like Invesco and LIC on the proposed transaction with Sony.

    In an annual general meeting (AGM) held on September 13, the largest shareholder of Zeel, Invesco Developing Markets Fund and OFI Global China Fund IIC, holding 18 per cent stake in the media company, called an extraordinary general meeting of the shareholders seeking to remove Punit Goenka, the sitting MD, and two more independent directors from the board of the company. The two independent directors Ashok Kurein and Manish Chokhani had submitted their resignations a day prior. The funds sought the appointment of their own six nominees on the board of Zeel.

    Zeel’s promoters had pared their stake in the company to four per cent to pay off debt worth Rs 13,000 crore.