The development comes in the backdrop of the Zee-Sony merger deal
The court on Thursday asked Zee Entertainment Enterprises to call a meeting of shareholders, as sought by top investor Invesco which is pushing for the removal of the TV network’s CEO and a board revamp.
Any resolution passed at the extraordinary general meeting will be put on hold, however, until the Bombay High Court decides on the legality of the Invesco’s request for such a meeting. Zee and Invesco did not immediately respond to a request for comment.
Invesco, which owns nearly 18 per cent of Zee via two funds, wants a shakeup at the TV network over corporate governance concerns at a time when the company is planning a merger with the local unit of Japan’s Sony Group.
That move is set to create India’s biggest broadcaster but Invesco has raised concerns about options given to Zee’s founding family, which includes its CEO Punit Goenka, to raise their stake in the merged company to 20 per cent.
Zee’s founder and Goenka’s father Subhash Chandra has accused Invesco of plotting a hostile takeover. Invesco has denied the charge but said that earlier this year it tried to forge a deal between companies owned by Reliance Industries, controlled by billionaire tycoon Mukesh Ambani, and Zee.
“In my view, we should not belittle this dispute as a dispute for control by Invesco,” said Mohit Saraf the founder of Saraf & Partners law firm, which is not involved in the case.
“This dispute will set the litmus test for enforceability of shareholding rights in this country.”
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