The conflict between Punit Goenka and Invesco intensified on Wednesday with the latter moving the National Company Law Tribunal against Zee Entertainment Enterprises for failing to announce a date to hold an Extraordinary General Meeting.
Invesco had called for the EGM to remove promoter and MD Punit Goenka from the company’s board. NCLT will be hearing the matter on Thursday where Dhruve Liladhar & Co is representing Invesco while Trilegal is representing Zee.
Many believe that this move by Invesco is premature since Zee has 21 days to notify them of the EGM date. Therefore, they have time till October 3 to respond.
Shriram Subramanian, MD of InGovern Research Services, a corporate governance advisory firm, said “Invesco seems to have needlessly jumped the gun. Section 100 gives the company 21 days to call for the EGM. And, in any event, even if the company doesn’t call, Section 100 allows Invesco to call the EGM on its own at the cost of the company and the directors.”
JN Gupta, MD of another corporate governance firm, Stakeholders Empowerment Services, concurred with Subramanian saying that while Invesco has the liberty to go to the NCLT, it is likely that NCLT won’t entertain this petition on Thursday.
May delay Sony-Zee merger
Subramanian further added, “All the other shareholders of Zee will be left wondering on the motivation behind Invesco’s move. On the contrary, it may be detrimental to the interests of all shareholders as it could delay the Sony-Zee merger process. However, it should not impact the Sony due diligence process itself and Sony seems to be committed to this merger with Punit Goenka as the MD.”
However, another executive from a local corporate advisory firmtold BusinessLine on conditions of anonymity, that this move might be valid on Invesco’s part. “The October 3 deadline is not as sacrosanct as the 45-day window after the September 12 letter was received within which the EGM needs to take place. In order to do so, the procedure to commence holding of the EGM should have begun,” said the representative on conditions of anonymity.
Also read: ‘Invesco’s insistence on EGM likely to be inconsequential for Zee’s Punit Goenka’
If Zee intended to adhere to the deadline, notifications regarding the board meeting to decide the date would have already been sent out since shareholders must be provided prior notice, the executive said.
A Zee spokesperson said the move by Invesco is premature. “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 Fund and OFI Global China Fund, LLC,” the spokesperson said. The Hindu BusinessLine