The National Company Law Tribunal (NCLT) has asked Zee Entertainment Enterprises Ltd (ZEEL) to reply by Thursday on a plea filed by the company's majority stakeholders Invesco Developing Market Funds and OFI Global China Funds. ZEEL, which had already approached the Bombay High Court in the same matter, says it continues to take all the necessary steps in the best interest of its shareholders as per the applicable law.
During the hearing before the NCLT Mumbai bench, senior counsel Navroz Seevrai submitted that the interim relief sought by Invesco-OFI was the same as its final relief – which is to direct the ZEE's board to call for an EGM as per their requisition.
Senior counsel Janak Dwarkadas, representing OFI Global China Fund, pointed out that ZEEL had filed a 420-page plea before the Bombay High Court. "Impossible to believe that this large plea was readied on the same day as ZEEL board resolution. The HC plea from ZEEL is nothing but insurance in case the NCLT orders it to call an EGM," he contended.
Senior counsel Mukul Rohatgi, representing Invesco, also called the stand taken by ZEEL before the NCLT 'unfair'. He says, "ZEEL is only interested in delaying the case before the NCLT."
Observing that ZEEL now knew all arguments of Invesco-OFI, the bench headed by Bhaskara Pantula Mohan asked the company to file its reply in the next two days or before the next hearing on Thursday.
Last week, Invesco-OFI approached the NCLT against ZEEL for failing to announce a date for the extraordinary general meeting (EGM), that it had requisitioned for seeking removal of Zee's chief executive and managing director Punit Goenka and reconstituting the board.
Invesco-OFI, which holds a 17.88% stake in ZEEL, had also proposed the names of six independent directors as part of the EGM requisition.
As per rules, listed companies are supposed to announce a date for an EGM within three weeks of it receiving such a request from an investor holding at least 10% shares.
Invesco-OFI had put its foot down and insisted on the EGM even after ZEEL announced its merger plans with Sony Pictures India Ltd last month. As per the terms of the ZEEL-Sony non-binding merger announcement, Punit Goenka will remain in charge of the merged entity as managing director (MD) and chief executive officer (CEO) for the next five years.
While Invesco has not rejected the deal negotiations with Sony, it has noted in its letter sent to the company board on 23 September 2021 that the business of ZEEL is valuable, "whether on its own or in strategic alignment with partners such as Sony."
Meanwhile, ZEEL had said the company would continue to take all the necessary steps in the best interest of its shareholders and as per the applicable law.
Last Saturday, ZEEL had moved the Bombay High Court against Invesco-OFI's requisition for an EGM to discuss various issues, including removing its managing director Punit Goenka.
The company's plea before the court is to declare the call for EGM invalid after Invesco got an NCLT nod seeking the ZEE board's meeting. At its meeting on 1st October, the board rejected the EGM call, terming it as invalid and illegal.
ZEEL is engaged in a boardroom brawl with the company's two largest shareholders expressing non-confidence with the existing management and seeking an EGM to sack a few directors, including ZEEL's MD and CEO Punit Goenka.
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