Clandestine attempt to take over Zeel, says Subhash Chandra on Invesco’s notice

Zeel’s top two investors had sought the removal of MD Punit Goenka through an EGM.

New Delhi: As the boardroom tussle between Zee Entertainment Enterprises Ltd (Zeel) and its investors rages on, Essel group chairman Subhash Chandra who founded Zee TV said the latest move by its US-based investors is a "clandestine attempt to take over the Company".

“They (Invesco) has taken a hideous route to oust the current leadership. It is nothing, but an attempt to take over the Company in an illegal manner. This is not permitted under any of our (Indians) laws. They need to come clean on their exact motives. They need to be transparent, which they are not,” said Chandra on Wednesday, during an interview aired on Zee News.

Chandra founded Zee TV in 1992 and reminisced the journey that the media and entertainment network has traversed over the last three decades. “In those days, our role was mainly that of a public broadcaster, creating awareness, and then slowly we evolved and provided family entertainment to masses. Today, the Zee channels are watched by crores of Indians, who consider Zeel as part of their family. It is not just any other business,” said the media veteran.

Talking about the calls for removal of the Company’s MD and CEO Punit Goenka, Chandra said the Board and shareholders had placed their trust in him, and announced him as the MD, and any decision on the leadership rests with them. “Zeel is not owned by any one individual or investor,” emphasised Chandra. “It is owned by over 2.5 lakh shareholders who are part of its family. They are the real owners. The Board is also independent.”

Zeel has been battling a boardroom crisis ever since, its two investors - the US-based Invesco Developing Markets Fund and OFI Global China Fund IIC who together hold an 18 per cent stake in the media company called for the removal of MD and CEO Punit Goenka. The investors had sent a requisition notice to the Board on 11 September demanding an extraordinary general meeting (EGM).

They had also sought the removal of long-standing directors and close associates of the Chandra family from the Board, including two independent directors Ashok Kurien and Manish Chokhani, and suggested a few names of their own. Both had submitted their resignations a day prior. Meanwhile, the new appointments are yet to be approved by the ministry of information and broadcasting (I&B).

“Such tactics (of Invesco) must draw the attention of the government and Securities Exchange Board of India (SEBI) who should consider taking action against them,” said the Zee TV founder, highlighting that Invesco has not been transparent about their future course of action, especially after their proposed removal of Goenka as MD. "No ship can sail out in the sea without a captain, and no Company can function even a day without a sitting MD."

While Invesco remains adamant on the EGM, Zeel too is defending the company with equal vigour. On Wednesday, the company moved the National Company Law Appellate Tribunal (NCLAT) against the order passed by National Company Law Tribunal (NCLT) to submit its reply to the investors’ demand for an EGM. The media and entertainment company has also moved the Bombay high court seeking to declare the requisition as “illegal and invalid.”

“The Board is independent, and it has taken the decision based on the counsel of their senior legal experts. If Invesco wants to take over the Company through such hideous routes, then, the Company will not let that happen,” he summed up.

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