A. Issue of Minority Shareholder
Zee Chairman Emeritus Subhash Chandra on Wednesday asked minority shareholder Invesco to make an open offer and take over the company, if it wants, instead of acting in a clandestine manner. Invesco has been pressing for an Extraordinary General Meeting (EGM) to discuss various issues, including the removal of Managing Director Punit Goenka and appointment of its nominees on the board.
Terming it as an “illegal step being taken by Invesco”, the media doyen said, “This is insider trading, and a takeover.” “You are an 18 per cent shareholder but not the owner, you need to follow the laws of the country. Make an open offer to 75 per cent shareholders and take over the company if you want,” he asserted.
B. Annual General Meeting vs Extra Ordinary General Meeting
An extraordinary general meeting (EGM) is a shareholder meeting called other than a company’s scheduled Annual General Meeting (AGM) between a company’s shareholders, executives and any other members. The extraordinary general meeting is utilized to deal with urgent matters that come up between annual shareholders’ meetings. There is no fixed time for holding an Extra-ordinary General meeting (EGM) unlike Annual General Meeting. However, there are some business which are urgent which cannot be delayed till Annual General Meeting, this is when Extra-ordinary General meeting (EGM) comes into picture which gives a company freedom to transact business in whom the consent of shareholders/ members are required under The Companies Act, 2013.
C. Zee Company and Invesco
Invesco is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life.
Zee Entertainment Enterprises Limited is a media and entertainment company engaged in providing broadcasting services. The Company operates through Content and Broadcasting segment. It offers content in multiple languages and offers approximately 38 international and over 30 domestic channels. The Company has a library, housing over 222,703 hours of television content. The Company holds rights to approximately 3,820 movie titles. The Company’s brands include Zee TV, Zee Cinema, Zee Action, Zee Classic, Zee Anmol, Zee Cafe, Zee Studio, Zee Salaam, Zing, ETC Bollywood, Zee Q and Zindagi. The Company has a range of offering in the regional language domain with channels, such as Zee Marathi, Zee Talkies, Zee Bangla, Zee Bangla Cinema, Zee Telugu, Zee Kannada, Zee Tamil and Sarthak TV. It high definition offerings include Zee TV HD, Zee Cinema HD, &tv HD, Zee Studio HD, Zee Cafe HD, &pictures HD, Ten 1 HD and Ten Golf HD. The Company has operations in over 170 countries.
Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) along with OFI Global China Fund LLC hold 17.88 per cent stake in ZEEL. The minority shareholders have moved a petition before NCLT seeking convening of the EGM, removing the company”s Chief Executive and Managing Director Punit Goenka as well as two other directors, and reconstituting the board with the appointment of six new directors.
D. Proposed Merger
Talking about Zee Entertainment Enterprises” (ZEEL’s) proposed merger with Sony Pictures Networks India Ltd, Chandra said it has a per-condition that his son Punit Goenka would lead the merged entity.
“The terms Sony has put, the pre-condition is that Punit will run the company for atleast 5 years. The Japanese based company wants to work as a team player and run with the Indian management,” he said.
E. Petition filed before NCLT
ZEEL on Wednesday moved NCLAT seeking more time to file a reply over the requisition of Invesco and OFI Global China Fund to convene an EGM. The appellate tribunal has listed the matter for Thursday.
On Tuesday, the NCLT had directed ZEEL to file a reply over the petition by its minority shareholders by October 7 (Thursday), the next date of hearing. Last week, the board of the company had rejected the minority shareholders” demand.
“In its meeting held on October 1, 2021, the board has arrived at a conclusion that the requisition is invalid and illegal; and has accordingly conveyed its inability to convene the Extraordinary General Meeting to Invesco Developing Markets Funds and OFI Global China Fund, LLC,” ZEEL had said.
The meeting was convened after the NCLT had directed ZEEL to hold a board meeting to consider Invesco’s plea.
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