Invesco Developing Markets Fund, Zee Entertainment Enterprises’ largest shareholder, on March 23 said it had decided not to pursue an extraordinary general meeting (EGM) to add six independent directors as Zee’s merger with Sony will achieve the fund’s aim of strengthening board oversight, sending Zee's stock up over 16 percent in morning session on March 24 .
“Since we announced our intention to requisition, Zee has entered into a merger agreement with Sony. We continue to believe this deal in its current form has great potential for Zee shareholders. We also recognise that, following the merger, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company,” the fund said.
Invesco will continue to monitor the proposed merger’s progress.
“If the merger is not completed as currently proposed, Invesco retains the right to requisition a fresh EGM,” it added.
This comes after the Bombay High Court, on March 22, quashed a single-judge order granting interim injunction on holding the EGM to remove Zee chief executive Punit Goenka. “We have held that the requisition notice (for EGM sent by Invesco to Zee) is neither illegal nor incapable of being set aside," the court said.
Also Read: Invesco may favour Zee-Sony deal if promoter stake does not exceed 4% at merger: Sources
Senior counsel for Zee sought a status quo which the court allowed for three weeks.
In September 2021, Invesco sent a requisition to the Zee board to hold an EGM as it felt the company was not running smoothly. The fund that owns nearly 18% of Zee sought to remove three directors from the board including Goenka.
After Zee’s refusal to respond to the requisition, Invesco moved the company law tribunal which ordered considering the requisition.
Challenging the tribunal, Zee approached the high court asking it to declare the requisition notice as illegal and invalid.
In October 2021, a single bench granted an injunction against holding of the EGM in an interim order which Invesco challenged saying the high court had no jurisdiction to hear the matter which should have been decided by the tribunal.
At 9.50 am, the Zee stock was trading at Rs 298.15, up Rs 42.10 or 16.44 percent on NSE. It touched an intraday high of Rs 307.25 and an intraday low of Rs 281.65.
The scrip was trading with volumes of 977,155 shares, compared to its five-day average of 821,338 shares, an increase of 18.97 percent.
Invesco
Invesco is a global investment management. With offices in more than 20 countries, it managed $1.6 trillion in assets as of 31 December 2021.
Invesco Developing Markets Fund is a US registered investment company which as of 31 December 2021 had approximately $45.2 billion assets under management. Invesco Advisers, Inc serves as the fund’s investment adviser. Invesco Advisers, Inc is an indirect wholly owned subsidiary of Invesco Ltd.
As of 31 December 2021, the Invesco Developing Markets strategy held investments totalling $7.9 billion (Rs 59,000 crore approximately) in India – representing about 17.3% of total assets under management worldwide. This exposure represents a significant over-weight in favour of India within global allocation. Further, these investments, including Zee, are almost all long dated and reflect 15 plus year history of investing in India.
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