The Bombay High Court on October 21 asked Zee Entertainment Enterprises Ltd to call an extraordinary general meeting (EGM) as requisitioned by shareholders Invesco Developing Market Funds and OFI Global China Fund.
The court added that the EGM resolution has to be kept in abeyance till it decides on the legality and validity of EGM requisition.
Counsel appearing for Zee Entertainment said that the company will inform the date of the EGM by tomorrow morning, i.e., October 22.
The EGM is to be chaired by a retired judge, the court said, adding that the resolution will be subject to the approval from the Ministry Of Information & Broadcasting, CNBC TV 18 reported.
Battle for a meeting
Invesco, which along with OFI Global China holds nearly 18 percent stake in Zee, had written to the company's board on September 11 seeking an EGM.
The meeting was sought by them to push for the ouster of directors Ashok Kurien and Manish Chokhani, along with MD and CEO Punit Goenka.
Apart from their ouster, Invesco, through the EGM, also sought the appointment of six new directors—Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, and Gaurav Mehta.
On October 1, the Zee board rejected the EGM call citing the opinion received from eminent legal experts. It claimed that the reason to call such a meeting is no longer valid as Kurien and Chokhani have resigned from their posts.
Invesco, which is the company's largest shareholder, had approached the National Companies Law Tribunal (NCLT) seeking a mandatory legal order for the EGM. On October 8, the tribunal had given a two-week period to Zee to file a reply on Invesco's plea.
Meanwhile, the boardroom battle had reached the Bombay HC on October 2, after Zee moved a plea seeking the EGM demand raised by Invesco and OFI Global to be declared as illegal.
The high court on October 13 announced that it would hear the case on October 21, and asked Invesco and OFI Global China Fund to file an affidavit by October 20.
Deal or no deal
On October 11, a month after its EGM request, Invesco sent out an open letter expressing disappointment over Zee's "reckless public relations campaign" to counter the demand for leadership change.
"We are calling on Zee shareholders to join us in asking why the founding family, which holds under 4% of the company’s shares, should benefit at the expense of the investors who hold the remaining 96%," it wrote.
The next day, Zee released a letter claiming that Invesco had tried to force it into a deal with a large Indian group. Zee claimed that it had refused the deal because the group's entities, which were to be merged with Zee, was given an inflated valuation by at least Rs 10,000 crore.
A day later, Invesco shot back with another letter to the shareholders, saying that it was merely a facilitator. The fund said that the deal was to be decided between Zee's promoter family and the group, which Invesco named as the Reliance group.
"Zee’s 12 October disclosure is yet another tactic to delay an EGM that will give shareholders their right under Indian law to vote for a slate of independent trustees and pave the way for a healthier future for Zee," Invesco had written.
Reliance later released a statement saying that it had made a fair offer, but it had abandoned the deal after differences arose between Punit Goenka and Invesco.
“At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further," the company statement had said.
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