The board of ZEE Entertainment Enterprises Limited (ZEEL) will not convene the Extraordinary General Meeting (EGM) as demanded by its largest shareholder Invesco Developing Market Funds. The company gave this information in documents submitted to the regulator on October 1.
This statement from ZEEL comes at a time when the National Company Law Tribunal (NCLT) a day ago, while hearing the petition of Invesco, said that the board of ZEE must consider the demand for convening the EGM under the rules. .
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In documents sent to the regulator, ZEE said that the board held a meeting on October 1 to seek an extra-ordinary meeting on behalf of the shareholders. “In view of the interest of the Company at large, including all shareholders and stakeholders, we express our inability to convene the EGM on your demand,” the company said.
The company also claimed that it has reached this conclusion after consulting legal experts, including former Supreme Court judges. ZEE also said that Invesco had sought an EGM to seek the removal of two directors, Ashok Kurian and Manish Chokhani, as well as the company’s MD and CEO, Punit Goenka.
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However, Kurien and Chokhani have already resigned from their posts, ZEE said. As such, Invesco’s demand to call the EGM is now “unnecessary”. “The Board is of the unanimous view that Invesco’s EGM convening notice is not valid and contains several legal lapses,” the company said.
JN Gupta, founder, Stakeholders Empowerment Services, a proxy advisory firm, says that rejecting the EGM demand on technical grounds is “not a sign of good governance”. “ZEE should have informed about it in advance if it had noticed any lapses in the EGM notice,” he said.
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Let us inform that Invesco and OFI Global China Fund hold about 17.88% stake in Zee Entertainment. Both the shareholders had sent a notice on September 11, demanding the convening of the EGM. Apart from the removal of three directors, including MD Goenka, Invesco had also sought the appointment of six new directors on the board.
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