The boardroom battle between Invesco and Zee Entertainment has taken a judicial turn. Fireworks can be expected at the NCLT hearing today as the two warring camps Invesco as well as ZEE Entertainment come face to face.
US-based Invesco Developing Markets Fund, on Wednesday, September 28, 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 officer and managing director, Punit Goenka and reconstituting the board.
When CNBC-TV18 reached out to Invesco and asked on the merits of the case and why they had moved NCLT against Zee Entertainment, Invesco said that it was because of ZEE’s failure to take steps within the notice period to call an extraordinary general meeting (EGM) and also because of the delay in noticing the EGM’s call on September 11, and failure to notice the September 23 letter to the exchanges.
Earlier this month, Invesco Developing Markets Fund and OFI Global China Fund LLC collectively holding 17.88 percent stake in ZEEL, had sought an extraordinary general meeting to remove Punit Goenka and two independent directors Manish Chokhani and Ashok Kurien from the position of directors. Chokhani and Kurien had subsequently resigned from the board.
When CNBC-TV18 reached to Zee Entertainment and asked them about their plan of action and their response to the NCLT, they said that the board remains committed to act within the framework of law and that they were in the process of taking required steps within the statutory period.
What is statutory period?
Experts say 21 days is given to any company to call for an EGM once the requisition letter has come from a shareholder. As per the rules, ZEEL has up till October 2 to call for an EGM and Invesco’s requisition was sent to ZEEL on September 11. So a few more days are remaining for the Zee Entertainment board to act upon this. Moreover, as per law entire 45 days are required to complete the process of EGM, so they can push it by three more days as per law.
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 removal of Punit Goenka.