BT Exclusive: In no mood to give up battle, Invesco lists reasons why it dragged Zee to NCLT

Allegations are flying thick and fast in the Zee-Invesco battle. The next stop in this intricate battle is the National Company Law Tribunal (NCLT) on Thursday. What will transpire is anyone’s guess but there is no stopping Invesco’s aggression or for that matter, Zee Entertainment’s desire to merge itself with Sony Pictures Networks India. It has been the most incredible 19 days at Zee, starting with the letter shot off by the Atlanta-based Invesco that holds a 18 per cent stake, calling for the ouster of Punit Goenka, Zee’s MD & CEO and also Subhash Chandra’s son. One also witnessed an early morning announcement a few days later – Zee and Sony wanting to combine their operations to form a seriously large entertainment major with a presence in both Hindi and regional markets as also a significant sports portfolio. Clearly, Invesco was having nothing of this. The priority was to push for an extraordinary general meeting (EGM) where it hopes Goenka will be removed and a new board, led by Invesco’s own appointees as independent directors, will be ushered in. In the most detailed response, Invesco’s spokesperson, Jeaneen Terrio, told Business Today, over email that it sent Zee an EGM requisition letter on September 11 exercising its rights as ordinary shareholders to protect shareholder value in the company. “This initiative, which is unique in the history of our fund, was taken with a belief that a newly constituted Board elected by its shareholders would be foundational in reviving the long-term health of the business. On 23 September, 2021, we reiterated our call for an EGM in a letter to the Board of Directors of Zee,” it said. It goes on to scathingly say that “The company’s failure to take steps within its notice period to call an EGM, coupled with its delay in noticing our EGM on September 11 and failure to notice our September 23 letter to the exchanges, has prompted us to file a petition before the NCLT to enforce our rights as shareholders to call for this EGM of the company.” In India, Invesco, apart from Zee has made investments in the likes of HDFC, Kotak Mahindra Bank, TCS, Infosys, HDFC Bank, Oberoi Realty, Godrej Properties, HDFC Life Insurance and Havells India. “We have a long history of making long term investments in many world-class companies that have emerged in India. Our tenure as shareholders in Zee reflects this commitment and we continue to believe that the business is valuable, whether on its own or in alignment with a strategic partner. The deep bench of talent within Zee and in the Indian media industry has helped shape our view that any such transitions, if required, can be properly managed. As shareholders, we will continue our efforts to establish a fully staffed, independent and strengthened board at Zee,” said Terrio in the statement. It goes on to say how Invesco admires and respects the shareholder safeguards embedded in India’s corporate legal framework. “Our latest petition before the NCLT is intended to ensure that these safeguards are upheld so as to give shareholders of Zee a voice in choosing the governing board that will take Zee into a brighter future,” it adds. Zee, in its own statement put out last evening said it was a “premature step taken by Invesco Developing Markets Funds and OFI Global China Fund.” The spokesperson was clear that: “The board of the company remains committed to act within the framework of law and is focused towards enhancing the company’s growth and shareholder value. It is in the process of taking the required steps within the statutory period. The company does not wish to comment on any impulsive or premature steps taken by Invesco Developing Markets Funds and OFI Global China Fund.” All eyes are now on the NCLT and what they make of this extremely complex battle where no quarter is given or asked for.