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Zee moves Bombay High Court to declare Invesco requisition notice ‘illegal, invalid’ – CNBCTV18

Zee Entertainment Enterprises Limited has filed a suit before the Bombay High Court requesting it to declare shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC’s requisition notice to hold an extraordinary meeting (EGM) illegal and invalid, the company said on Saturday.

The announcement, via a letter sent to the Bombay Stock Exchange and National Stock Exchange, comes a day after the media firm refused to hold an EGM sought by the two shareholders to pass a resolution to remove Zee’s managing director and CEO Punit Goenka and appoint new independent directors earlier in September.
Meanwhile, sources have told CNBC-TV18 that Invesco is likely to seek dismissal of the suit filed by Zee as the same case is being heard by the National Company Law Tribunal (NCLT). The shareholder is expected to request the court to Zee’s petition as not maintainable, they added.

According to sources, Invesco is likely to argue that the EGM requisition is under Section 98 and 100 and is under the jurisdiction of NCLT.

On Friday, Zee pointed to multiples legal infirmities in the requisition notice due to which the company’s board concluded it is not valid.
Referring to the ‘multiples legal infirmities’ it has cited, Zee said 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 Invesco’s request to pass a resolution for the removal of Punit Goenka as Director of the company, Zee cited Paragraph 5.10 of the Policy Guidelines for Up linking of Television Channels from India (MIB Guidelines).

The rule, the company said, states, “It will be obligatory on the part of the company to take prior permission from the Ministry of Information & Broadcasting before effecting any change in the CEO/ Board of Directors.”

The developments come against the backdrop of the EGM sought by the shareholders on September 11. However, Zee failed to call the meeting and on September 22 announced the merger with Sony Pictures Networks India Private Limited. And, according to the proposed transaction, both entities plan to list the merged entity where Punit Goenka will continue as the managing director and chief executive officer.

Earlier this week,  (NCLT) had observed that it is the “mandate of the law” that Zee should hold the EGM and clarified is not a discretionary power of the board to call or not call for EGM.

The NCLT will hear the matter again on October 4.

(Edited by : Kanishka Sarkar)

First Published:  IST