As Invesco stands firm on EGM, ball in shareholders court
Apart from seeking Punit Goenka's ouster, the largest shareholder in ZEEL has also proposed the names of six independent directors
The ZEE-Sony merger has hit the speed bump with Invesco Oppenheimer, the largest shareholder in ZEEL, reiterating its demand for holding an extraordinary general meeting (EGM) to oust MD & CEO Punit Goenka from the company.
As per the ZEE-Sony deal, Goenka would have remained at the helm of the combined entity as MD and CEO. In fact, Goenka's appointment as MD and CEO is one of the conditions for the merger deal between the two companies.
According to reports, Invesco had shot off a letter dated September 23 to the board of directors of ZEEL following the announcement of the ZEE-Sony deal. In the letter, Invesco said that the disclosure of 22 September 2021 (signing of term sheet between ZEE and Sony) is symptomatic of the erratic manner in which important and serious decisions have been handled at the company.
“The Board is seized of the matter. The Company will take necessary action as per applicable law,” a ZEEL spokesperson said.
Invesco also noted that the business of ZEEL is valuable, whether on its own or in strategic alignment with partners such as Sony. “A newly constituted board supported with the strength of independence will be best suited to evaluate and oversee the potential for strategic transactions, like the one announced on 22 September 2021 on a non-binding basis, as well as to make determinations on the future leadership of the Company,” the letter reads.
It also said that the EGM has been requisitioned to protect shareholder value and in exercise of our statutory rights as an ordinary shareholder. “We have called upon the Company to hold an EGM, and it is your duty under company law to now do so. At this EGM, shareholders of the Company will decide the composition of the Company’s board of directors in a free and democratic manner.”
Invesco also stated that the ZEEL board is duty bound to hold and EGM. “We trust that the current board of directors of the Company will adhere to its fiduciary duties and not violate its statutory obligations to convene the EGM as requisitioned by Invesco under its letter dated 11 September 2021. We urge the board to reflect on this communication and act in the best interest of the Company, its public shareholders and uphold the highest standards of corporate and board governance.”
With a 17.88% stake, Invesco is the largest shareholder in ZEEL. Apart from seeking Punit's ouster, the company has also proposed the names of six independent directors.
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