Reliance Industries Ltd (RIL) said it proposed to merge all its media properties with Zee Entertainment at fair valuations during discussions in February and March 2021 that US investment firm Invesco helped arrange with managing director and member of the founding family of the media and entertainment company, Punit Goenka.
But the deal had to be abandoned after differences arose between Goenka and Invesco after the Zee founders demanded increasing their stake by subscribing to preferential warrants, it said. “The investors seemed to be of the view that the founders could always increase their stake through market purchases,” RIL said.
“At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further.”
Invesco, which owns 18 percent of Zee, has called for a recast of Zee's board and the removal of Goenka over alleged corporate governance lapses.
Also Read | Zee's Punit Goenka negotiated potential deal with Reliance, not us, fires back Invesco
Reliance said the proposal to merge with Zee sought to harness the strengths of all the merging entities and would have helped to create substantial value for all, including the shareholders of Zee. The proposal included continuation of Goenka as managing director and issue of ESOPs to the management, including Goenka, according to the company.
“Reliance always endeavours to continue with the existing management of the investee companies and reward them for their performance.”
In its statement, Reliance said its regrets being drawn into the dispute between Zee and Invesco.
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