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The National Company Law Tribunal (NCLT) on Thursday directed Zee to positively consider the requisition made by Invesco to conduct an extraordinary general meeting (EGM) to vote on the removal of CEO and MD Punit Goenka.
In response, Gopal Subramanium, the legal counsel representing Zee group’s promoters, told NCLT that the company will decide on the request by Friday.
October 3 deadline
Independent directors of the company will meet to discuss the matter on Thursday, after which a board meeting will be held to consider Invesco’s requisition. Subramanium further added that Invesco’s petition to the NCLT was a prejudgement of the matter since the company had time till October 3 to decide. Following the submission made by Zee, NCLT said there will be further hearings on Monday, October 4, by when the 21 day time period for Zee to announce the EGM date would have elapsed.
Invesco’s petition
Invesco had petitioned NCLT on Wednesday to compel Zee to hold the EGM. The counsel for the Invesco argued that they were justified in petitioning the NCLT, stating that no indication had been made by Zee acknowledging Invesco’s notices.
Also see: ‘Invesco’s insistence on EGM likely to be inconsequential for Zee’s Punit Goenka’
Furthermore, before the petition to the NCLT, no announcement of a board meeting to decide on the EGM had been made. In fact, according to Invesco’s counsel, the petition galvanised Zee’s board into action.
Call for EGM
Mukul Rohatgi, former Attorney General of India, further argued on behalf of Invesco that while it can call upon an EGM on its own should Zee not announce a date, it wants NCLT to compel Zee to conduct the EGM.
Given that Zee has over 2.5 lakh shareholders, it would be difficult for Invesco to call for an EGM since it does not possess the information and address of all shareholders to notify them about the meeting.
Therefore, under section 98 of the Companies Act, NCLT possesses jurisdiction to compel Zee since, “if for any reason it is impracticable to call a meeting of a company or to hold or conduct the meeting of the company, the tribunal may, either suo motu or on the application of any director or member of the company…….order a meeting of the company to be called.”
On September 11, Invesco, which is the largest minority shareholder of Zee with 18 per cent of shares requisitioned the company, called for an EGM to remove Punit Goenka. This was reiterated in the September 23 notice made right after the September 22 merger announcement between Sony and Zee.
Invesco-Zee merger
Invesco disputed the terms laid out for the merger which enable Goenka to continue on as the CEO for an additional five years after the merger.
Also see: Invesco’s EGM call: Time running out for Punit Goenka
The Invesco counsel categorically said that they are not against the merger. However, they want shareholders to decide upon the terms of the merger.
Rohatgi, in his arguments to the NCLT bench, said that Invesco is afraid its interests will not be held in this merger where it is unsure regarding the dilution of its shares while promoter Goenka ensured that his share percentage remains constant at 3.99 per cent. Goenka deciding the terms of the merger is not agreeable to Invesco, he added.
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