MUMBAI: Invesco Developing Markets Fund along with OFI Global China Fund LLC, both foreign funds, on Wednesday approached the National Company Law Tribunal (NCLT) against Zee Entertainment 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.
Invesco senior counsel Vikram Nankani, with advocate Gaurav Mehta, mentioned the matter for an urgent hearing and the Mumbai bench of the NCLT has scheduled it for Thursday. For Zee, senior counsel Navroze Seervai and Sudipto Sarkar opposed the move, saying there was no urgency for 21 days.
Invesco, which has its registered office in Houston, Texas, US, and OFI Global are shareholders of Zee Entertainment representing almost 18% paid-up share capital of the company with voting rights, making it Zee’s largest shareholder. They said that the EGM has not been called for despite a valid requisition by them on September 11.
They are seeking to invoke the powers of the NCLT under the Companies Act to convene an EGM of the shareholders of Zee. The requisition by the two shareholders sought also the appointment of six independent directors on the Zee board.
A Zee spokesperson said, “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.”
On September 13, Zee Entertainment had disclosed to the stock exchanges that it had received the resignation of two non-independent directors — Manish Chokhani and Ashok Kurien. Pointing this out, the application before NCLT added that there has since been a “stoic silence” on their requisition.
On September 22, Zee announced approval and execution of a non-binding term sheet with Sony Pictures (Sony India) for a potential merger. Non-calling of an EGM constitutes an “oppressive act” and is “gross mismanagement” of the company’s affairs, the application said. It added that the decision on future governance and board composition of the company rests with its shareholders and not its board.
The applicants said they apprehend that, before the EGM, as requisitions, Zee may take various steps to render the process infructuous, adding that there is a large body of public shareholders of the company and public interest involved.