US-based Invesco Developing Markets Fund on Wednesday has moved the National Company Law Tribunal (NCLT) against Zee Entertainment Enterprises Ltd (ZEEL) for failing to announce a date for the extraordinary general meeting (EGM) to remove Zee's chief executive and managing director Punit Goenka and reconstituting the board.
The case is listed for hearing at the Mumbai bench of the NCLT on Thursday (September 30). Invesco has moved NCLT under Section 98 (1) & 100 of the Companies Act which gives the NCLT the power to convene an EGM. Also, the act gives power to NCLT to penalise any entity failing to call an EGM.
As per the rules, ZEEL has up till October 2 to call for an EGM and Invesco requisition was sent to ZEEL on September 11. Also, rules allow 21 days to call the EGM and the process must be completed in 45 days.
"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," a company spokesperson for ZEEL said.
Earlier this month, Invesco Developing Markets Fund and OFI Global China Fund LLC collectively hold a 17.88 percent stake in ZEEL had sought an extraordinary general meeting to remove Goenka and two independent directors Manish Chokhani and Ashok Kurien. Chokhani and Kurien had subsequently resigned from the board.
OFI and Invesco further sought the appointment of their own nominees on the Zee Entertainment board including Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli and Gaurav Mehta.
The two investment firms further attached all relevant declarations and information required from each of the proposed independent directors when seeking mandatory approvals from the Ministry of Information and Broadcasting.
Invesco had written to Zee Entertainment opposing its recently announced merger with Sony Pictures India. It termed the occurrence as symptomatic of the company's erratic manner of handling important and serious decisions. It also reiterated its demand for the removal of Goenka.