Zee Entertainment Enterprises (ZEE) share price fell 5 percent in the morning trade on September 27 after its largest shareholder Invesco persisted with the demand for calling an extraordinary general meeting (EGM).
As reported by Moneycontrol, Invesco, the largest shareholder in the Subhash Chandra-backed firm, is insisting on EGM which seeks a newly reconstituted board and the removal of MD & CEO Punit Goenka.
The demands are in contrast to the terms of the Zee-Sony non-binding merger announcement which leaves Goenka as MD & CEO.
The share price of Zee Entertainment Enterprises (ZEE) touched a 52-week high of Rs 362.85 on September 23, gaining 39 percent in the previous session after the company signed a merger deal with Sony Pictures India.
In a September 23 letter to the board of directors of Zee Entertainment Enterprises, Invesco referred to the non-binding merger announcement and said “your disclosure of 22 September 2021 is symptomatic of the erratic manner in which important and serious decisions have been handled at the Company”. Moneycontrol has reviewed a copy of the letter.
Invesco, however, did not reject the deal negotiations with Sony and highlighted in the letter that the business of Zee Entertainment Enterprises was valuable, "whether on its own or in strategic alignment with partners such as Sony".
“A newly constituted board supported with the strength of independence will be best suited to evaluate and oversee the potential for strategic transactions, like the one announced on 22 September 2021 on a non-binding basis, as well as to make determinations on the future leadership of the Company,” it said.
Invesco, which holds a 17.88 percent stake in Zee Entertainment, had proposed the names of six independent directors. It did not respond to a set of detailed queries from Moneycontrol which sent multiple reminders.
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A company spokesperson for Zee Entertainment said, "The Board is seized of the matter. The Company will take necessary action as per applicable law”.
At 1034 hours, Zee Entertainment Enterprises was quoting at Rs 309.15, down Rs 9.70, or 3.04 percent on the BSE.