New Delhi: The National Company Law Tribunal (NCLT) on Thursday directed the board of Zee Entertainment Enterprises (ZEEL) to conduct an extraordinary general meeting (EGM) before October 3 to consider the company’s biggest investor Invesco Developing Market Funds’ demand for the ouster of company’s three directors including MD and CEO Punit Goenka. This is in accordance with the law, the Mumbai bench of NCLT said on September 30.

Worth mentioning here is that Invesco, who along with OFI Global China Fund LLC, holds a 17.88% stake in ZEEL, had moved the NCLT on Wednesday against ZEEL for not calling an extraordinary general meeting of the company.

The NCLT, while hearing Invesco’s plea, observed that ZEEL should call for the EGM as per the law. It is not a discretionary power of the board to call or not call for EGM, the tribunal added. The board does not have any right to deny an EGM sought by shareholders having one-tenth of the total shareholding, the tribunal said.

ZEEL, which had last week announced its merger with rival Sony Pictures Networks India to create the largest media firm in the country, termed the steps by its minority shareholders as “impulsive or premature”.

“The Board of the Company remains committed to act within the framework of law and is focused towards enhancing the Company”s growth and shareholder value. It is in the process of taking the required steps within the statutory period,” said a ZEEL spokesperson. The company does not wish to comment on any impulsive or premature steps taken by Invesco Developing Markets Funds and OFI Global China Fund, LLC, he further said.

Invesco had also sought the appointment of six of its own nominees on the board of the company — Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli and Gaurav Mehta.

Goenka is the son of ZEE founder and Essel Group chairman Subhash Chandra. Essel Group currently owns 4% stake in the company. 

On September 22, ZEEL and Sony Pictures Networks India (SPNI) had announced their merger, which will create the country’s largest media company. The merged entity, in which SPNI’s parent company Sony Pictures Entertainment would infuse $1.575 billion, will be a publicly listed company in India. Moreover, the move will also provide a lifeline to ZEEL Managing Director and Chief Executive Officer Punit Goenka.