Zee Entertainment Enterprises Ltd (ZEEL) on Friday informed the stock exchanges that it will not be able to conduct an extraordinary general meeting (EGM) as requested by two institutional investors Invesco and OFI Global China Fund LLC to discuss various issues, including removal of Managing Director Punit Goenka.
This comes just a day after the Mumbai bench of National Company Law Tribunal (NCLT) asking Zee to call for an EGM, as mandated by the law. The tribunal said the decision to call an EGM or not is not a discretionary power of the board.
The petition filed by the minority shareholders is scheduled to be heard by the NCLT on October 4.
In a board meeting held today, Zee said the issue was deliberated by the board at length and in the best interests of the company, including all the shareholders, a decision was reached not to proceed with an EGM.
The company said it has taken written legal advice from in-house counsel, as well as independent legal advice from eminent former judges of the Supreme Court and senior corporate lawyers.
"After considering the unanimous advice received about the legal validity of the requisition notice, the board deliberated, and unanimously concluded that it is not valid, as it suffers from multiples legal infirmities," Zee said.
Punit Goenka has recused himself from the board meeting and did not participate as he was an interested party in the discussions.
Zee said Invesco's proposal of making fundamental changes to the board of directors and key managerial personnel by seeking removal of the executive director will result in non-compliance with Sebi regulations.
Invesco which holds a 17.88% stake in ZEEL had earlier called for an EGM of shareholders seeking the removal of Punit Goenka.
Invesco has 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.
On Friday, ZeeL scrip was trading lower by nearly 3% at ₹294.35 on NSE.
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