Zee Entertainment Enterprises Ltd (ZEEL), On October 2, filed a case with the Bombay High Court, requesting that the requisition by a foreign investor to conduct an extraordinary general meeting (EGM) be declared “illegal and void.”
The move comes after the media company rejected its biggest investor–Invesco Developing Markets Funds decision to seek an extraordinary general meeting (EGM) to remove some directors, claiming “several legal infirmities.”
But, the step has been taken ahead of the National Company Law Tribunal’s (NCLT) next hearing, scheduled today. According to a stock exchange announcement, ZEEL has filed a suit in the Bombay High Court under the usual original civil jurisdiction.
The company said that there would be no financial implications as such except the legal costs.
Earlier, in the Sept 11 requisition letter, Invesco called an EGM for removal of MD and CEO Punit Goenka, and non-executive directors Ashok Kurien and Manish Chokhani, insinuating at contravening corporate governance norms. Kurien and Chokhani, although resigned from their post ahead of the AGM.
In the same letter, Invesco which owns 17.88% of the stake in ZEEL through its subsidiary OFI Global China Fund, requested to induct six of its candidates onto the Indian firm’s board of directors. Six proposed nominations from Invesco are– Surendra Singh Sirohi, Aruna Sharma, Rohan Dhamija, Gaurav Mehta, Srinivasa Rao Addepalli and Naina Krishna Murthy.
The ZEEL board of directors denied the EGM request on Friday, citing “many legal infirmities” and calling the notification “invalid and unlawful.” The board stated in an exchange filing that it has decided to repudiate the EGM demand after considering several non-compliances with Sebi and Ministry of Information and Broadcasting standards, as well as the Companies Act.
“The board has arrived at this decision by referring to various non-compliances under multiple laws, including the Securities and Exchange Board of India (SEBI) Guidelines, Ministry of Information and Broadcasting Guidelines and key clauses under the Companies Act and Competition Act, and after taking into account the interests of all the shareholders and stakeholders of the Company,” ZEE said in a statement on October 1.
Zee has entered into a legal battle against Invesco and has filed a suit before the Bombay High Court under the ordinary original civil jurisdiction, Zee Entertainment Enterprises Ltd said in a stock exchange notice.