Zee Entertainment Enterprises Ltd. has moved Bombay High Court against US-based investor Invesco Developing Markets Fund and OFI Global China Fund LLC after the two stakeholders had requisitioned for an Extraordinary General Meeting to replace Zee’s current Chief Executive and Managing Director Punit Goenka and reconstitute the Board with the appointment of six new directors.
The company on Saturday, October 2 stated in a regulatory filing that it has filed a suit before the Bombay High Court under the ordinary original civil jurisdiction, petitioning to the Court to “declare that the requisition notice sent to the Company by Invesco Developing Markets Fund and OFI Global China Fund LLC (shareholders of the Company) is illegal and invalid.”
The civil suit comes just a day after Zee held a Board meeting on the direction of the National Company Law Tribunal (NCLT) to deliberate on the requisition proposed by Institutional investors Invesco and OFI Global China Fund, LLC, who hold a combined stake of 17.88% in the company.
“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,” ZEEL said in the statement presented to the stock exchanges.
ZEEL stated that it had come to the conclusion after deliberating it at length on October 1 after “referring to various non-compliances under multiple laws, including the Securities and Exchange Board of India Guidelines, Ministry of Information and Broadcasting Guidelines and key clauses under the Companies Act & Competition Act, and after taking into account the interests of all the shareholders and stakeholders of the company,”
“After considering the unanimous advice received about the legal validity of the requisition notice, the board deliberated, and unanimously concluded that it is not valid, as it suffers from multiples legal infirmities,” Zee said, announcing on Friday that it would not be moving forward with the EGM.
Following the announcement, ZEEL’s shares declined almost 3% and it was trading at 294.35 on NSE and closed at ₹295.85, while the stock dipped 2.44% to close at ₹295.55 on the BSE.