Invesco on Thursday approached a division bench of the Bombay High Court to challenge the verdict of a single-judge bench of the court earlier this week that restrained the US fund manager from calling a special shareholders’ meet to remove Zee Entertainment Enterprises Ltd’s managing director Punit Goenka and also reconstitute the board.
The appeal before the larger bench of the high court will be heard on Friday, according to the HC website.
On Tuesday, Justice G.S. Patel said the demand of Invesco, which owns 17.88% shares in Zee, asking for an extraordinary general meeting was not legally compliant. This offered a breather to Zee group founder Subhash Chandra, who is battling a revolt against his family’s control of India’s largest publicly traded broadcaster.
“It cannot be correct to say that the board is to rubber-stamp every requisition,” Justice Patel said in his 44-page order. “I also do not suggest that shareholders’ rights are curtailed or abrogated or that they cannot seek what they now do. But the manner in which they go about doing it must be legally compliant.”
Executives from both Invesco and Zee acknowledged that delays in deciding whether the EGM needs to be called offers Zee an advantage because the company can get additional time to complete the due diligence process for its proposed transaction with Sony Pictures Networks India Ltd and seek shareholders’ approval.
Chandra is betting that shareholders will favour its merger proposal with Sony over Invesco’s demands.
Zee and Sony plan to complete inspection of books and assets as part of the proposed merger by the end of November, three weeks ahead of the 90-day deadline set by the two broadcasters, Mint reported on Tuesday.
Time is also essential in Invesco’s fight against Zee because a special shareholder meeting called before 31 December to remove Goenka and appoint six directors would have needed approval from half of the shareholders.
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