Invesco Developing Market Funds wants the National Company Law Tribunal (NCLT) to make a mandatory order for Zee Enterprises Entertainment Limited (ZEEL) to call the extraordinary general meeting (EGM) that the shareholder has been demanding.
Invesco is not concerned about the outcome of the EGM, but about the EGM being called, said senior advocate Mukul Rohatgi, who is representing the shareholders in the National Company Law Tribunal Hearing (NCLT) on October 4.
"My apprehension that they (Zee) are not going to call the meeting has proved correct", said senior advocate Mukul Rohatgi. "We are not concerned with the outcome of EGM. We are only concerned about the EGM being called".
Also Read : Zee-Invesco Row | NCLT says EGM must be called, to hear matter next on Oct 4
The senior advocate also mentioned that the court may appoint a retired judge of High Court to chair the meeting (EGM) and pass order that the Board and company lend all assistance to Chairman.
Invesco, which along with OFI Global China Fund LLC holds a 17.88 percent stake in ZEEL, had moved the NCLT on September 29 -- around two weeks after it demanded an EGM to push for the ouster of company's three directors including MD and CEO Punit Goenka.
Rohatgi in court emphasized that Zee is bound to call the requisition and the meeting. "They are thinking that they have a right to sit over my requisition and decide when or whether what I wish is correct or not, the error is that they are bound to call the requisition, and the meeting. It is for the shareholders to decide how to go and deal with my proposals in the requisition", he said.
He also said that at no stage does the law give any right whatsoever for any authority including a court or an individual to question the motive of the resolution (to call an EGM) or the objective of the resolution.
Also Read: Zee moves Bombay High Court against Invesco, wants EGM demand declared illegal
Rohatgi also remarked that Zee is not giving contact details of shareholders required to call the EGM. "There are more than 2.5 lakh retail shareholders. Not possible in a reasonable way for shareholders to call EGM. Zee won't give contacts detail of shareholders required to call EGM", he said.
With regards to the appointment of six independent directors that Invesco has sought, Rohatgi said that persons appointed will not take up any duties unless the Board writes to the Ministry of Information and Broadcasting (MIB). Invesco argued that the consent of MIB is required and that the company has to take MIB's approval, not the shareholders.
The six new directors that Invesco has sought an appointment for are, Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, and Gaurav Mehta.
Also Read: Zee says will not hold EGM as demanded by shareholder Invesco
OFI Global China Fund, who also moved the NCLT along with Invesco, remarked at the hearing that the meeting that Zee Entertainment board had conducted on October 1 was just a legal formality and that it's a classic case of 'forum shopping'.
"Zee Entertainment has displayed a classic case of 'Forum Shopping'. The meeting of Zee Entertainment board on October 1 was just a legal formality. The Board has already taken advice from experts on validity of EGM requisition", said Janak Dwarkadas, Counsel, OFI Global China Fund.
Zee, in a regulatory filing, on October 1 said the board had convened a meeting to discuss the demand raised by the shareholders for the extraordinary meeting.
"In the best interests of the company as a whole, including all its shareholders and stakeholders, we express our inability to convene the
EGM," it said.
The matter has now been listed for further hearing on October 5.
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