ZEE Entertainment: Bombay HC Temporarily Bars Invesco from Calling EGM
Moneylife Digital Team 26 October 2021
In a setback to the largest shareholders, the Bombay High Court (HC) on Tuesday granted an interim injunction on Invesco Developing Markets Fund and OFI Global China against calling an extraordinary general meeting (EGM) of Zee Entertainment Enterprises Ltd (ZEEL) shareholders. Last week, the HC had reserved its judgement in the dispute between ZEEL and Invesco
Earlier in the day, in a regulatory filing, ZEEL says its board meeting scheduled on 27 October 2021, to consider unaudited financial results for the second quarter of FY21-22, has been cancelled due to lack of quorum. “The next date of the meeting will be duly informed with fresh notice,” it says. 
During the previous hearing, ZEEL had told the bench of justice Gautam Patel that it would not call an EGM as requisitioned by its largest shareholders.
Senior counsel Gopal Subramanium representing ZEEL contended that Invesco Developing Markets Fund was a foreign investor with stakes in several listed companies in India. “As Invesco has proposed to appoint six directors on the board of ZEEL, it would tantamount to taking control of the company,” he says, adding, “There is no concept of an independent director being suggested by shareholders.”
So far, both Invesco Developing Markets Fund and OFI Global China have not made any open offer for ZEEL. Last month, these shareholders asked the company board to call for an EGM to remove Punit Goenka as managing director (MD) and chief executive (CEO) and two other directors and appoints six of its nominees.
During the hearing on Friday, Mr Goenka alleged that Invesco is ‘seeking control’ of the company’s board and trying to ‘sabotage’ its proposed merger with Sony Pictures Networks India (Sony India).
Senior counsel Kapil Sibal, representing Mr Goenka, argued that there needs to be a public offer if there is a change in control of the board, and before effecting any change to the board, prior permission from the ministry of information and broadcasting (MIB) is required.
Senior counsel Janak Dwarkadas, representing OFI Global China, contended that to call for an EGM, the shareholder must have 10% in the company. “It is my right as a shareholder to call for the EGM,” he contended. Invesco Developing Markets Fund and OFI Global China hold a 17.88% stake in ZEEL.
ZEEL, Invesco and OFI Global China have been engaged in a tussle since September at various forums, including the Bombay HC, the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
Last Thursday, the HC had asked ZEEL to hold the EGM, chaired by a retired judge and keep in abeyance the resolutions passed till the HC decides on the legality and validity of EGM requisition.
You may also want to read...
Free Helpline
Legal Credit