Invesco | Zee Entertainment: Invesco claims potential transaction was negotiated between Reliance and Punit Goenka

A day after Punit Goenka, MD & CEO of Enterprises (ZEE), informed the company’s board that Invesco was trying to oust him after he rejected a potential merger deal with a large Indian group, Invesco has claimed that the deal was negotiated by and between and Goenka and others associated with ZEE’s promoter family.

Goenka had not named Reliance Industries, but maintained that Invesco representatives had told him that the deal would be consummated with or without him.

“We wish to make clear that the potential transaction proposed by Reliance (the ‘strategic group’ referenced but not disclosed in the October 12 communication by Zee) was negotiated by and between Reliance and Goenka and others associated with ZEE’s promoter family. The role of Invesco, as ZEE’s single largest shareholder, was to help facilitate that potential transaction and nothing more,” Invesco said in a statement.

Goenka had informed ZEE board that Invesco had approached him in February with a proposed merger with a large Indian group, without naming Reliance.

Invesco added that it rejects in full the assertions made by ZEE on October 12.

“We specifically note that the implication that we as a shareholder would seek out a transaction for ZEE that is dilutive to the long-term interests of ordinary shareholders, including ourselves, simply defies logic,” the offshore investor said.

Invesco on September 11, sent a requisition notice to the ZEE board, seeking an extraordinary general meeting (EGM) of the shareholders to remove Goenka and two other directors from the board and induct six new independent directors of its choice.

Since then the company and the investor have been embroiled in a legal battle.

While ZEE board has rejected the requisition notice, terming it invalid, and filed a civil suit in the Bombay high court, Invesco has dragged the company to the National Company Law Tribunal (NCLT) seeking direction to hold an EGM.

“We have made various sincere efforts over the last two years to bring ZEE back to good health. Discussions around strategic alignments have been just one part of this effort. ZEE’s October 12 disclosure is yet another tactic to delay an EGM that will give shareholders their right under Indian law to vote for a slate of independent trustees and pave the way for a healthier future for ZEE,” Invesco said.

While reiterating its confidence in the ability of ZEE to realise its full potential with the strength of an independent board, Invesco said that the recent interest of Sony, as well as the previous interest of Reliance, should be a reminder to all ZEE shareholders of the “enormous value” that lies in the company, “much in contrast to its dismal performance under the current leadership” and board over the last few years.

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