Zee Entertainment Enterprises Ltd (ZEEL) on Saturday filed a petition before the Bombay High Court asking it to declare the requisition by a foreign investor to hold an extraordinary general meeting (EGM) as “illegal and invalid”.
This follows the media firm’s rejection of a notice by its top investor Invesco Developing Markets Funds to convene an EGM to evict certain directors, citing “multiple legal infirmities”. The move comes ahead of the next hearing before the National Company Law Tribunal (NCLT) on Monday.
The company has filed a suit before the Bombay High Court under the ordinary original civil jurisdiction, ZEEL said in a stock exchange notice.
ZEEL also added that there would be no financial implications on the company with regards to the civil suit, except legal costs.
Earlier in its September 11 requisition letter, Invesco had sought convening an EGM to remove chief executive officer and managing director Punit Goenka and non-executive directors Ashok Kurien and Manish Chokhani, alleging breach of corporate governance norms. Later, Kurien and Manish Chokhani resigned ahead of ZEEL’s AGM.
In the same letter, Invesco (formerly Invesco Oppenheimer Developing Markets Fund) — which, together with its subsidiary OFI Global China Fund, holds a 17.88% stake in ZEEL — had also sought inducting six of its nominees on the Indian firm’s board.
On Friday, ZEEL’s board rejected the EGM requisition citing “multiple legal infirmities” and termed the notice as “invalid and illegal”.
The board, in a stock exchange filing, said it had arrived at this decision by referring to various non-compliances under Sebi and ministry of information and broadcasting (MIB) guidelines and Companies Act, among others. The board has also taken into account the interest of all shareholders and stakeholders of the company.
Expressing its ability to convene the EGM, the company also said it was in the best interest of the firm, including all its shareholders and stakeholders.
ZEEL said it needed prior permission from the ministry of information and broadcasting, and added the proposal by Invesco to appoint one-half of the board would also result in the foreign investor effecting a change in control of the company without making an open offer.
On its part, Invesco had moved NCLT’s Mumbai bench on Thursday, and the appeal came up for hearing on Friday. The tribunal had adjourned the case to Monday.