Zee Entertainment Enterprises has 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”.
ZEE announced that its board has rejected the request of shareholders, Invesco and OFI Global China Fund, to convene an EGM to discuss various issues, including removal of Managing Director Punit Goenka.
According to ZEE, the appointment of new independent directors, as proposed by Invesco in the requisition notice, is subject to prior approval from the Ministry of Information and Broadcasting.
On September 30, 2021 the National Company Law Tribunal (NCLT) at Mumbai had directed the Board of Directors (BoD) of Zee Entertainment Enterprises (ZEE) to consider requisition made by the company’s largest investor to hold an extraordinary general meeting (EGM) by October 3,2021.
A bench of Bhaskara Pantula Mohan and CB Singh said, “We direct respondents (ZEE) to consider requisition made by the petitioners (Invesco) under the Companies Act positively and comply with section 100 of Companies Act.”
The tribunal was hearing an application filed by the shareholders to hold an EGM and consider removal of MD & CEO Punit Goenka and two other non-independent non-executive directors from the company’s board and induction of six new independent directors.
The promoters, including Goenka, hold 3.99 per cent of the shares in the company. The remaining 96.01 percent of the shares are held by the public of which the two petitioners, together, hold 18 percent shares in ZEE.
The NCLT was expected to hear Invesco’s plea on October 4, 2021. However, on the said date, the National Company law Tribunal adjourned the hearing on the tiff between Zee Entertainment Enterprises Ltd and Invesco after hearing initial remarks from the latter.
The tribunal hearer the matter on October 5, 2021 wherein Invesco urged the NCLT to pass an order to ensure the convening of the company's Extraordinary General Meeting (EGM). Its counsel Mukul Rohatgi told the court that it was “mandatory duty" of Zee Entertainment Enterprises Ltd (ZEEL) to honour the EGM requisition as Invesco has 18 per cent shareholding in the company and as per law, a minimum of 10 cent shareholding is needed to request for convening an EGM.
By not convening the EGM, Zee will create hindrances if funds call for EGM independently, Rohatgi argued, further requesting appointment of a retired High Court judge to chair the EGM.
The Tribunal thereafter asked Zee Entertainment to file reply on Invesco's plea for EGM by Thursday (October 7, 2021) and adjourned the hearing for the same date.