What next as Zee takes on Invesco-OFI?

01 Oct,2021

 

By Our Staff

 

So will we see a real-life Mahabharata war here? Right now it appears to be that, but in true TV soap style, guess it’s necessary to have some flexing of muscles before Zee founder and chairman emeritus Subhash Chandra pulls out all his trump cards, as he almost always does.

 

On Friday afternoon, in filings to the stock exchanges, Zee has clearly declined the holding of an EGM, with details in an annexure. The letter addressed to Invesco and OFI concludes:

 

“At its meeting held on October 1, 2021, the Board considered the Requisition Notice. Earlier, the Board obtained written legal advice from the Company’s counsel as well as independent legal advice from eminent former judges of the Supreme Court and senior corporate lawyers. After considering the unanimous advice received about the legal validity of the Requisition Notice, the Board deliberated, and unanimously concluded that the Requisition Notice is not valid, as it suffers from multiples legal infirmities which are summarized in the Annexure to this communication…. Accordingly, in the best interests of the Company as a whole, including all its shareholders and stakeholders, we express our inability to convene the EGM on the lines requisitioned by you.”

 

Here’s a link to filing: https://www.bseindia.com/xml-data/corpfiling/AttachLive/4b679cc6-bceb-4b78-a730-8acddc9eeb01.pdf

 

And this what a statement noted:

 

This has reference to the requisition notice received by the Board of Zee Entertainment Enterprises Ltd., from Invesco Developing Markets Funds and OFI Global China Fund, LLC. The Board, comprising of experienced professionals deliberated and discussed various legal and statutory implications of the requisition notice.

The Board sought the opinions of independent counsel, legal experts including senior retired Supreme Court judges and evaluated the matter in a fair and transparent manner. In its meeting held on 1st October 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.

The Board has arrived at this decision by referring to various non-compliances under multiple laws, including the Securities and Exchange Board of India Guidelines, Ministry of Information and Broadcasting Guidelines and key clauses under the Companies Act & Competition Act, and after taking into account the interests of all the shareholders and stakeholders of the Company.

The Company cannot comment on any future actions since the matter is sub judice.

 

From what we gather, there have been a fair number of attempts made to convince various quarters about how Zee is being wronged. It’s not that the Invesco-OFI aren’t reaching out to the media, but Friday’s development is sure to see lawyer fees as a significant component in the account books of the Zee as well as of Invesco-OFI.

 

While we had The Times of India front-paging a report on the National Company Law Tribunal diktat on the EGM, there was this interview of RPG Enterprises chairman in The Economic Times that batted for Chandra and Punit Goenka and even spoke of an unnecessary shareholder activism.

 

 

According to our sources, the Zee founder is making every attempt to ensure that the company he so painstaking created and nurtured doesn’t get out of his hands. The final approval for the Zee-Sony merger would require an ‘aye’ of 75 per cent of ZEEL’s shareholders many of who could work on the guidance of the government.

 

Meanwhile, we can be sure that the Invesco-OFI camp is not going to sit quiet. First, there is an NCLT hearing coming up on October 4.

 

Wait for it.

 

Dear Editor: we think, we need to seriously consider employing a journalist well-versed in company law on our rolls. What say?

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