The war of words between Zee Entertainment Enterprise and its largest shareholder Invesco continues.
A day after Zee released a letter saying that Invesco tried to pressure the company’s managing director Punit Goenka into a deal with entities of a large Indian group, Invesco has hit back at the promoter family.
The US fund said that it was Punit Goenka and members of the promoter family who had negotiated a potential deal with Reliance (the large Indian group which Zee did not name).
In a statement, Invesco refuted Zee’s allegations and questioned why it will seek a transaction for Zee that dilutes the long-term interests of ordinary shareholders. The Invesco group holds 17.88 percent in Zee.
Zee’s allegation “simply defies logic,” said the Invesco statement. “Zee’s 12 October disclosure is yet another tactic to delay an EGM that will give shareholders their right under Indian law to vote for a slate of independent trustees and pave the way for a healthier future for Zee.”
“The role of Invesco, as Zee’s single largest shareholder, was to help facilitate that potential transaction and nothing more,” added Invesco in its statement.
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Invesco also said that it has made various efforts over the last two years to bring Zee back to good health. Reiterating its confidence in the media company, Invesco said that the recent interest of Sony, as well as the previous interest of Reliance, should be a reminder to all Zee shareholders of the enormous value that lies in the company, “much in contrast to its dismal performance under the current leadership and Board over the last few years.”
On October 12, Zee made a disclosure that the offer to merge with entities with a large Indian group was presented by Invesco representatives Aroon Balani and Bhavtosh Vajpayee to Punit Goenka in February 2021. The offer also included a promise that Goenka would have been appointed MD & CEO of the merged entity, Zee claimed.
The release said that the offer was turned down by Goenka, “as the merging entities of the strategic group were over-valued.”
This assumes significance as Invesco, through a letter sent to the board on September 11, sought an extraordinary general meeting to push for the ouster of three directors including MD and CEO Goenka. In a later message to Zee shareholders, Invesco had raised governance concerns at the media company and said that the promoter family benefited at the cost of others.
The Zee board has rejected Invesco’s EGM demand citing the opinion received from “eminent legal experts including former Supreme Court judges”.
The EGM issue is being heard at the courts.