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Subhash Chandra, founder and chairman emeritus of Zee Entertainment Enterprises Ltd (ZEEL), sought to stoke nationalistic sentiment in a televised appearance on Zee News, as he made an emotional appeal for support and demanded that the government, regulators, and the people should step in to stop what he alleged was an illegal and clandestine takeover attempt by Invesco of India’s largest listed media company.

He sought to frame the investor rebellion as the case of an Indian company under siege by a foreign shareholder and compared the US-based Invesco, one of the world’s largest fund managers, to the East India Company—the British Corporation that once colonized India.

Invesco is Zee’s single largest shareholder, with about 18% equity ownership. It is seeking to reconstitute the company’s board and oust Chandra’s son and Zee managing director Punit Goenka. The company and the shareholder are battling it out in multiple judicial forums over the latter’s demand for an extraordinary general meeting of shareholders. Zee has entered into a non-binding agreement to explore a merger with Sony Pictures Networks India, part of Japanese conglomerate Sony Corp. The holding of Chandra and family, the promoters of Zee, is now down to 3.99%.

During the TV appearance, the 71-year-old appeared to be holding back tears at one point. Chandra said he will not let the American fund manager succeed in its effort to wrest control of Zee.

“I don’t think this takeover will ever happen," Chandra said in an interview to Zee News, which is part of Zee Media Corp. Ltd, a sister company of Zee Entertainment. “I will request them (Invesco) with folded hands to not fight. But then I’m open to fighting if you want to indeed fight."

“Zee is not just a business. It is a part of the lives of crores of Indians," said Chandra, a pioneer of satellite broadcasting in India, who launched Zee in 1992.

“Zee does not belong to me, it is not owned by Invesco, and they should not behave like owners either. The Zee network belongs to the 250,000 shareholders and the 90 crore people who tune in to watch it every day," said Chandra.

To be sure, much of Chandra’s speech reiterated issues that have been discussed over the last week in a company court in Mumbai, which is currently hearing arguments made by the counsels of Invesco and Zee.

Invesco, which first picked a 7.74% stake in 2002 and later upped its stake by picking an additional 10% stake in July 2019, first wrote to the board of Zee in a letter demanding to hold a special meeting of shareholders. Invesco sought the removal of two independent directors, Ashok Kurien and Manish Chokhani, and wanted to sack Punit Goenka. Finally, it wanted shareholders to vote on the induction of six new board members.

Kurien and Chokhani resigned voluntarily on 13 September.

For now, Invesco has not spelt out any reasons beyond mentioning corporate governance issues, as the reason why it is demanding changes at Zee.

Zee rejected Invesco’s demand to hold an EGM and has additionally filed a 420-page lawsuit before the Bombay high court to adjudicate if Invesco’s demands are valid.

Nine days after Invesco’s demand, on 22 September, Zee announced that it had agreed to explore a merger with Sony Picture Network India. Under the proposed deal, Sony will invest almost $1.6 billion and take a 53% stake in the merged entity. Upon completion of the merged entity, Sony will transfer 2% of equity to the founder of Zee, whose total holdings in the merged entity will become 4%.

An email sent to Invesco went unanswered.

“On 11 September, we sent an EGM requisition letter to Zee, exercising our rights as ordinary shareholders to protect shareholder value in the company," a spokeswoman for Invesco said in an email dated 29 September.

“This initiative, which is unique in the history of our fund, was taken with a belief that a newly constituted Board elected by its shareholders would be foundational in reviving the long term health of the business."

Varun Sood in Bengaluru contributed to this story.

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