An independent investment management company ‘Invesco’, on Wednesday, revealed that it facilitated talks between Reliance Industries and Zee Entertainment for a potential tie-up earlier this year, and also claimed that the Indian billionaire and Managing Director of Reliance Industries Ltd were interested in the media company.
However, the US investment company dismissed Zee’s accusations that it was applying double standards by opposing a prospective merger with Sony Group’s India subsidiary on conditions identical to those negotiated with Reliance. Invesco’s answer is the latest in a public feud in which the US investor, who owns 18 per cent of Zee, is demanding a board restructuring and the ouster of CEO Punit Goenka for alleged corporate governance violations.
Zee said on Tuesday that Invesco defiance on Sony deal “runs contrary to the very deal Invesco was proposing” with Mukesh Ambani’s company and also the demands of the investment management firm were not concerned with corporate governance or the company’s business.
Zee also alleged that Invesco created circumstances for hostile acquisition, and also claimed the demand of Invesco for an EGM was invalid and illegal.
The two parties are now embroiled in a nasty legal and public squabble, with one side striking out at the other on a near-daily basis.
While the Zee comments on Tuesday kept under wraps which deal Invesco had tried to arrange, the US firm’s statement disclosed the name for the first time and it has come out to be Reliance, Mukesh Ambani led conglomerate.
“The role of Invesco, as Zee’s single largest shareholder, was to help facilitate that potential transaction and nothing more,” Invesco said.
“…the implication that we as a shareholder would seek out a transaction for Zee that is dilutive to the long-term interests of ordinary shareholders, including ourselves, simply defies logic.”
Reliance already owns the media company– Network18 that runs TV channels like VH1, Nickelodeon, MTV, some local language channels and news portals like Firstpost and Moneycontrol combined with news channels– CNN-News18 and CNBC TV18.
Zee’s statement on Tuesday says that it had rejected the Reliance deal proposal over valuation concerns and also it could eventually “result in a loss to the stakeholders of the company.”