Days after the National Company Law Tribunal (NCLT) asked Zee's board to consider Invesco Developing Markets Fund and OFI Global China Fund LLC’s request for an Extraordinary General Meeting (EGM), Zee Entertainment Enterprises Limited (ZEEL) filed a suit before the Bombay High Court requesting it to declare shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC’s requisition to hold an extraordinary meeting (EGM) illegal and invalid, the company said on Saturday.
The announcement, via a letter sent to the Bombay Stock Exchange and National Stock Exchange, came a day after the media firm refused to hold an EGM sought by the two shareholders to pass a resolution to remove Zee’s managing director and CEO Punit Goenka and appoint new independent directors earlier in September. The NCLT is set to hear the Zee- Invesco matter later today. HP Ranina, economist, corporate lawyer, Hetal Dalal, president and COO, IiAS, and JN Gupta, former ED, Securities and Exchange Board of India and managing director at Stakeholders Empowerment Services, discussed this further.
According to Ranina, since the matter is pending before the NCLT on a similar point, Bombay HC would not like to consider the suit at this stage.
“I don’t know why they have done this. All these multiple cases are complicating the issues and also trying to undermine the authority of the NCLT,” Ranina said.
Hetal Dalal also believes that a lot of this (cases) is basically going to complicate things in terms of legal matters.
“They are going to use the jurisdiction to delay the entire process. I don’t think it is in anybody’s hands. The court now has to decide how this is going to play out and given this period of the judicial system, this is likely to be protracted,” she mentioned.
According to Dalal, the board is trying to block Invesco in terms of the actions that Invesco wants to undertake. “We logically believe that the board should engage with shareholders and try to address the issues or find a particular middle ground. Invesco also on the other side is looking at stricter and stricter and regulatory actions but in terms of being able to get its message through, it does need to engage with the remaining set of shareholders. Therefore, more open articulation of what the issues are, how it stands on the entire transaction and how it proposes to progress assuming Punit Goenka is not in the equation anymore is going to be the driver of how much comfort investors finally have in terms of how they are going forward, that is the way to look at this. All of this legal protracted battle is essentially just a strategy in terms of blocking the investors’ move to remove Punit Goenka,” she explained.
“Invesco saying, I do not want to conduct the EGM because I am a US-based investor doesn’t hold water because US-based investors can always hire agency here for doing things and the company is bound to provide details to shareholders,” Gupta said.
For the entire discussion, watch the accompanying video.