The National Company Law Tribunal (NCLT) on Thursday told Zee Entertainment Enterprises Limited (ZEEL) board to consider the shareholder Invesco Developing Market Fund’s requisition to hold an extraordinary general meeting (EGM).

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Invesco and OFI Global China Fund, which together hold 17.88 percent in ZEEL, had on Wednesday moved the tribunal against the media firm for not calling an extraordinary general meeting of the company.

The move comes as the two shareholders had earlier called for an EGM of shareholders seeking the removal of Managing Director Punit Goenka on September 11. However, Zee failed to call the meeting and on September 22 announced the merger with Sony Pictures Networks India Private Limited.

According to the proposed transaction, both entities plan to list the merged entity where Punit Goenka will continue as the managing director and chief executive officer.

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At today’s NCLT hearing, Invesco’s counsel Mukul Rohatgi, said, “Our shareholding is much higher than the threshold required to call EGM. We feel the company is not running as smoothly as it should. EGM has been sought to remove one Director and appoint some Independent Directors...We feel certain new Directors should come on the board so our interest is secured.”

As per the rules, ZEEL has up till October 2 to call for an EGM and Invesco requisition was sent to ZEEL on September 11. Also, rules allow 21 days to call the EGM and the process must be completed in 45 days.

Also Read: Zee EGM: Here’s why Invesco moved NCLT

Rohatgi said that 21 days are going to end over the weekend and Zee has done nothing towards calling the EGM. Tomorrow is the only working day for Zee to call for an EGM, he said.

Meanwhile, NCLT observed that it is the "mandate of the law" that Zee should hold the EGM and clarified is not a discretionary power of the board to call or not call for EGM. The board does not have any right to deny an EGM sought by shareholders having one-tenth of the total shareholding, the tribunal said.

“We have come early to the court as there is a proposal scheme under which Zee Ent will be merged with Sony and Punit Goenka will be the MD of the merged entity,” Invesco told NCLT.

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The tribunal, however, observed that the merger with Sony should not be a concern as it can't go through without Invesco's approval. It also noted that Zee Ent shouldn't have made the disclosure on discussions with Sony public as it is nothing but playing with the stock market, to which the media company responded saying it was a legal requirement.

Zee told the tribunal that Independent Directors are meeting today and will discuss the issue and decide on the EGM date.

The NCLT will hear the matter again on October 4.

(Edited by : Abhishek Jha)

First Published:Sept 30, 2021 6:44 PM IST