Contrary to Zee Entertainment-Sony Pictures India’s merger, the stage is set for explosives, with Invesco, the largest shareholder in the past, stepping down and insisting on an unusual general meeting (EGM) request for a new rebuilt board and removal of MD & CEO Punit Goenka.
Invesco’s demands on EGM contradict the terms of the Zee-Sony non-binding merger that leaves Goenka in charge as MD & CEO.
In a letter dated September 23 to the board of directors of Zee Entertainment Enterprises, Invesco referred to the announcement of a non-binding merger and said “your disclosure of 22 September 2021 is an indication of the incomprehensible way in which important and critical decisions are handled by the Company”.
Indeed, Invesco did not reject the contract negotiations with Sony and highlighted in the letter that the Zee Entertainment Enterprises business is important, “whether it is alone or in line with strategies with partners like Sony”.
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It further stated, “The newly established independent power board will be well-equipped to evaluate and manage strategic transaction power, as announced on 22 September 2021 irresponsibly, and to make decisions in the future leadership of the Company. ”
Explaining the reason for the need for EGM, Invesco said, “Directly to protect the number of shareholders and exercise our legal rights as a general shareholder, we have asked the Company to hold EGM, and it is your duty under company law to now do so. At this EGM, the Company’s shareholders will determine the composition of the Company’s board of directors in a free and democratic manner. ”
The firm concludes the letter by saying, “We hope that the Company’s board of directors will now adhere to its promises and not violate its official obligation to call EGM as requested by Invesco under its letter dated 11 September 2021. its shareholders in the community and maintain high standards of business and board governance. ”
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Invesco, which owns a 17.88% stake in Zee Entertainment, had nominated six independent directors as part of the EGM application. Didn’t answer a set of detailed questionnaires from Moneycontrol that sent multiple reminders. Zee Entertainment was not immediately available for comment on Invesco’s letter. This document will be updated as soon as we hear from the factory.