NCLT directs Zee board to consider Invesco’s demand for EGM

NCLT directs Zee board to consider Invesco’s demand for EGM

The Mumbai Bench of the National Company Law Tribunal (NCLT) on Thursday asked the board of Zee Entertainment Enterprises to consider the requirement of Invesco Developing Markets Fund and OFI Global China Fund LLC to hold the Extraordinary General Meeting (EGM) of the company.

Following the order, a meeting of the independent directors of the board was held on Thursday evening and the meeting remained inconclusive till it went to the press.

The meeting followed a direction of a division bench of Bhaskar Pantula Mohan and Chandrabhan Singh, who asked the board of the company to comply with the Companies Act, 2013, which states that the board of the company shall, at least on the request made by the shareholders Will not done. One tenth of the paid-up share capital of the company will be called as EGM.

Invesco Developing Markets Fund and OFI Global China Fund LLC hold 17.88 per cent in Zee Entertainment.

A Zee Entertainment spokesperson said: “The Board of the Company is to meet as per the allotted statutory time regarding this matter. The company will continue to take necessary action in the interest of the shareholders.”

The next hearing of the case will be on October 4.

The company has to convene the EGM within 21 days from the receipt of demand by the shareholder holding more than 10 per cent stake in the firm and keep the same within 45 days. If this is not done, the meeting may be called and held by the demander within three months from the date of the demand.

In this case, the company has over 250,000 public shareholders and therefore Invesco was unable to take this route.

Gopal Subramaniam, representing Zee Entertainment, told the bench that it depends on the facts of each case whether the company’s board wants to hold the EGM or not.

To this the bench said that it is not the discretion of the Board alone to call the EGM.

As the Board of the Company failed to convene the EGM and with the 21-day deadline for such meeting looming, Invesco Developing Markets Fund and OFI Global China Fund LLC approached the NCLT, seeking directions to the Company to call sought the intervention of the Tribunal. EGM.

Senior advocate Mukul Rohatgi, representing Invesco, said the reason for transferring the NCLT was that the company was not running as smoothly as it should have. Therefore, it seeks an EGM for the removal of Zee Entertainment’s Managing Director and Chief Executive Officer Puneet Goenka and two other directors who have resigned and for appointment of independent directors.

Janak Dwarkadas, appearing for Invesco, said the fund was apprehensive that the board would not convene the EGM as the company had informed the stock exchanges that it has signed a non-binding term sheet agreement with Sony Pictures.

Mohit Saraf, Founder and Managing Partner, Saraf & Partners, said: “NCLT observed that the board of Zee is bound to convene the EGM as per the shareholder’s request.”

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