Invesco Developing Markets Fund on Wednesday moved the National Company Law Tribunal (NCLT) against Zee Entertainment Enterprises (ZEEL) for not announcing a date for an extraordinary general meeting (EGM). The US fund has sought the EGM to reconstitute the board of the media company and oust its Chief Executive and Managing Director Punit Goenka. Apart from removing Mr Goenka, the US fund wants to induct six of its nominees on ZEEL’s board. 

The Mumbai bench of the NCLT is likely to hear the case on September 30. 

Invesco, which along with OFI Global China Fund holds a 17.88 per cent stake in ZEEL, will be represented by Dhruve Liladhar & Co in court, and Trilegal will represent ZEEL. 

“The board of the company remains committed to act within the framework of law and is focused towards enhancing the company’s growth and shareholder value. It is in the process of taking the required steps within the statutory period. The company does not wish to comment on any impulsive or premature steps taken by Invesco Developing Markets Funds and OFI Global China Fund, said a Zee spokesperson in an emailed statement today. 

According to rules, listed companies are supposed to announce a date for an EGM within three weeks of receiving such a request from an investor holding at least 10 per cent shares. 

Invesco had first sent a letter to Zee requesting the company to convene the EGM on September 11, which the latter had received on September 12. Therefore, Zee needs to announce the EGM date by October 2 at the latest.  

However, within days of it sending the letter to Zee, the latter had announced a merger deal with Sony Pictures. According to the terms of the proposed merger with Sony, Punit Goenka will continue as MD and CEO. 

In a second letter, dated September 23, Invesco had referred to the non-binding merger announcement between Zee and Sony and had said: “Your disclosure of September 22, 2021, is symptomatic of the erratic manner in which important and serious decisions have been handled at the company.” 

Invesco did not reject the deal negotiations with Sony and highlighted in the letter that the business of Zee was valuable, “whether on its own or in strategic alignment with partners, such as Sony”. 

It added further: “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 September 22, 2021, on a non-binding basis, as well as to make determinations on the future leadership of the company.”