The division bench of the Bombay High Court will continue its hearing in the Zee Entertainment and Invesco matter on November 30.
Janak Dwarkadas, counsel appearing for OFI Global China Fund that along with Invesco holds 17.88 percent stake in Zee, argued that the Bombay High Court bench had earlier suggested that even a single shareholder can block a requisition if he feels it is invalid.
He also said that Zee hijacked National Company Law Tribunal (NCLT) proceedings by filing a suit before Bombay HC.
He said that NCLT has the jurisdiction to decide on the requisition for an extraordinary general meeting (EGM).
The matter had first come up for hearing on October 29, after Zee’s largest shareholder Invesco and OFI Global approached the bench, challenging an October 26 Bombay High Court ruling by justice Gautam Patel.
Judge Patel had granted an injunction against Invesco’s call for an EGM on October 26. The court had observed that directing Zee to call an EGM would be potentially non-compliant. It said that there was a fundamental flaw in Invesco’s construct.
On the Bombay HC order, Dwarkadas said that the court's judgement to give injunction against requisition will have far reaching impact. "Court cannot injunct a meeting as its a statutory right of a shareholder with 1/10 share capital," he added.
Law which was well settled has been unsettled with Zee’s injunction, said Dwarkadas.
Justice Patel in his October 26 order had said, “In the scheme of the Companies Act, shareholders do not get to choose individual independent directors. They may only demand that there be independent directors.”On Invesco seeking removal of Punit Goenka as the MD and CEO of the company, Patel said: “The requisition demands his ouster — but without proposing a replacement. This puts Zee into a statutory blackhole, for it would then be totally in violation of Section 203(1); and it, and its directors, would have to face the liabilities, including fines, set out in Section 203(5).”