NS zee entertainmentThe merger of Sony Pictures India has taken a rocky road, as its largest shareholder Invesco Developing Markets Fund raised its demand to reconstitute the board of the Subhash Chandra-backed firm and schedule an Extraordinary General Meeting (EGM) to remove the MD. has been updated. And CEO Puneet Goenka.
according to a business standard report, Invesco in a letter dated 23 September Zee Entertainment Enterprises (ZEEL) Board reiterated its demand for EGM for removal of non-independent directors and requested to introduce six additional independent directors. Earlier this month, Invesco along with two board members had also sought an EGM for the removal of ZEEL CEO Goenka.
Sony’s Indian unit last week signed a non-binding offer to buy ZEEL. The proposal is currently in a 90-day special negotiating period, where the two sides will negotiate a binding agreement. The likely talks will also decide the shareholding pattern, as Sony India shareholders will hold around 53 per cent in the newly merged entity, while the rest will be held by Zee holders. Additionally, Sony will nominate a majority of the board members.
However, Invesco and OFI Global China Fund LLC, which together hold about 17.9 percent stake in the network, referred to the non-binding merger announcement and said that the deal was done “irregularly”. The letter urged Zee not to violate its statutory obligations to convene the EGM required by Invesco on September 11.
The board of ZEE has a deadline to convene the EGM in about three weeks. On failure, Invesco reserves the right to convene the meetings within six months. However, legal experts said that due to strictness on the part of both the companies, there could be a legal battle.
Invesco has neither ruled out nor backed down on deal negotiations with Sony, but highlighted in the letter that Zeel’s business is valuable, “whether in strategic alignment with or with partners such as Sony”.
Meanwhile, ZEEL will also take necessary legal action if required, a company representative said without confirming whether the media group has received Invesco’s letter. In addition, an Invesco spokesperson did not immediately respond to an emailed request for comment outside business hours, Moneycontrol.com reported.
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