Shares of Zee Entertainment Enterprises Ltd (ZEEL) rose as much as two percent after falling more than one percent in trade earlier on Monday. ZEEL has 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 notice to hold an extraordinary meeting illegal and invalid.
Shares of Zee Entertainment Enterprises Ltd (ZEEL) rose as much as two percent after falling more than one percent in a trade earlier on Monday.
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At 11:00 am, shares of the media company were trading 1.4 percent higher at Rs 299.80.
ZEEL said over the weekend that it has 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 notice to hold an extraordinary meeting illegal and invalid.
“In its meeting held on 1st October 2021, the Board has arrived at a conclusion that the requisition is invalid and illegal; and has accordingly conveyed its inability to convene the Extraordinary General Meeting to Invesco Developing Markets Funds and OFI Global China Fund, LLC,” Zee Entertainment Enterprises said in a regulatory filing.
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Meanwhile, sources told CNBC-TV18 that Invesco is likely to seek dismissal of the suit filed by ZEEL as the same case is being heard by the National Company Law Tribunal. The shareholder is expected to request the court to ZEEL’s petition as not maintainable, they added.
According to sources, Invesco is likely to argue that the extraordinary general meeting requisition is under Section 98 and 100 and is under the jurisdiction of NCLT.
The developments come against the backdrop of the extraordinary general meeting sought by the shareholders on September 11 to pass a resolution to remove ZEEL’s managing director and chief executive officer Punit Goenka and appoint new independent directors.
However, ZEEL failed to call the meeting and on September 22 announced the merger with Sony Pictures Networks India Private Ltd. And, according to the proposed transaction, both entities plan to list the merged entity where Punit Goenka will continue as the managing director and chief executive officer.
“Thankfully it was never something that I was very positive about. After it scaled up so well above Rs 200 mark - and that move also was stellar - it was difficult to resist profit booking out there,” said Prakash Diwan, a market expert.
“There are far better opportunities, simpler stuff to make money on, if I were a Zee shareholder, I would take some money off and wait for this to settle and relook at it once there is clarity but there is no recommendation to put fresh money into it on a hope trade that things will work out very soon,” Diwan added.
First Published: IST