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Saturday, February 24 2024

Invesco moves NCLT against Zee for not holding EGM, ZEEL terms move premature

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New Delhi: The boardroom battle involving Invesco Fund and OFI Global Fund China, the 18 per cent shareholder in Zee Entertainment Enterprises Ltd (ZEEL), and the existing management of the company has now landed in court with the fund house moving the National Company Law Tribunal to make ZEEL call an extraordinary general (EGM) meeting of shareholders to induct its nominees on the company’s board.

Invesco and OFI Global have moved the NCLT under Section 98 (1) & 100 and has sought its intervention to get ZEEL to call an EGM. Apart from inducting its nominee on the board, Invesco also want shareholders nod at the EGM to remove ZEEL’s current CEO and MD, Punit Goenka. Goenka is son of Essel group patriarch, Subhash Chandra, and the family currently owns only 4 per cent stake in the company.

The NCLT is expected to hear Invesco’s petition on Thursday.

Invesco’s move to petition the NCLT is also seen as a ploy to block ZEEL reaching an agreement with Sony Pictures Networks India (SPNI) for merging the entity with it and Punit Goenka heading the merged entity.

ZEEL informed the bourses about the move taken by Invesco moving the NCLT but said that it would have no financial implications on the except legal costs.

A ZEEL spokesperson termed the move of Invesco premature. “The Board of the company remains committed to act within the framework of law and is focused towards enhancing the company’s growth and shareholder value. It is in the process of taking the required steps within the statutory period. The company does not wish to comment on any impulsive or premature steps taken by Invesco Developing Markets Funds and OFI Global China Fund, LLC,” the spokesperson said.

Earlier, ZEEL Chairman R. Gopalan had told IANS that the merger involving ZEEL and Sony would work to the interest of shareholders of both companies as already shown by the share price movement seen on the bourses.

Asked whether, ZEEL’s two of the largest shareholders – Invesco Developing Markets Fund and OFI Global China Fund – who have indicated no confidence on the current management of the company has called for EGM to oust the existing board members, could derail the current merger process, Gopalan had said that is “unlikely to happen”.

“Shareholders would see what value the current management is bringing. If things are only getting better for the company, I don’t see why merger process gets rejected,” he had said clarifying that call for EGM by Invesco and OFI Global China and merger plan are two separate issues where shareholders would take a call.

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