ZEEL | Representative image
The Bombay High Court granted injunction against calling extra ordinary general meeting (EGM) today in the Zee Entertainment-Invesco row.
“In view of this discussion, there will be an injunction in terms of prayer clause (a) of the Interim Application, restraining Defendants Nos. 1 and 2 (including their employees, agents and anyone acting by, through or under them) from taking any action or step in furtherance of the Requisition Notice dated 11th September 2021, including calling and holding an EGM under Section 100(4) of the Companies Act, 2013,” said the court in its order dated October 26.
Zee had sought injunction against Invesco from taking any action or steps in furtherance of the requisition notice including calling and holding an EGM.
On October 22, the court reserved its order in the matter when Zee had argued that the call for an extraordinary general meeting (EGM) by its largest shareholders Invesco and OFI Global was illegal and invalid.
The counsel appearing for Zee Entertainment Gopal Subramanium had said that the board of a listed company should have an optimum balance between executive and non-executive directors. The change that Invesco wants to bring to the Board will defeat that purpose. Zee also noted that a prior permission is needed from the Ministry of Information & Broadcasting to make any such change.
Invesco shoots letter to Zee shareholders, seeks better governance
During the hearing, Kapil Sibal, appearing for Punit Goenka argued that if Goenka is removed then there will be no managing director and chief executive officer for the company and the Board and the company cannot function without the MD and CEO.
Counsel appearing for Invesco, Janak Dwarkadas in his argument said that they have a statutory right to call for an EGM and that they satisfy both numerical and procedural need to call an EGM.
He said that they need a numerical requirement of one-tenth of equity share cap to call for EGM, pointing towards the 17.88 percent stake jointly held by Invesco and OFI Global.
Dwarkadas also said that they have moved the National Company Law Tribunal (NCLT) and the tribunal has the power to decide on this case.
A day prior to reserving its order, the Bombay HC had asked Zee to call an EGM but had added that the EGM resolution has to be kept in abeyance till it decides on the legality and validity of EGM requisition.
Explained | The way ahead in the ZEE-Invesco case
The court had also said that the EGM will be chaired by a retired judge, adding that the resolution will be subject to the approval from the Ministry of Information & Broadcasting (MIB).
While Zee’s counsel Subramanium on October 21 during the Bombay HC hearing had said that the company will inform the date of the EGM the next day, on October 22, he reiterated that Invesco’s call for EGM is invalid.