2 min read.Updated: 14 Oct 2021, 03:39 PM ISTLata Jha
Goenka said he would withstand any amount of pressure to preserve Zee’s intrinsic value and ensure that nothing impacts the returns being delivered to all the shareholders
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NEW DELHI :
Punit Goenka, managing director and chief executive officer, Zee Entertainment Enterprises Ltd, on Thursday reiterated that the valuation of the broadcaster by American fund manager Invesco was not in the interest of the company's shareholders. Goenka, in a statement, also asked why Invesco did not make its plans public earlier.
The media group had told stock exchanges earlier this week that the American investor’s activism, including demanding a special shareholder meeting, followed Goenka rejecting a deal that Invesco had proposed earlier this year.
“During my briefing to the Board, I emphasised on the points pertaining to the proposal from Invesco. My attention was on the imbalance observed in the valuation and how it was not in the best interest of our shareholders. The only reason I did not agree to the proposal was because the shareholder value was getting compromised," Goenka said in the statement.
He said he would withstand any amount of pressure to preserve Zee’s intrinsic value and ensure that nothing impacts the returns being delivered to all the shareholders.
“I acknowledge the stance that has been taken by Invesco, but communications pertaining to such proposals are always well-documented, and they speak to the contrary," Goenka added.
“Does good corporate governance only apply to corporates and not their institutional investors?" Goenka asked, adding he reposes complete faith in the Indian judicial and regulatory system and is certain that these questions will be answered for all.
In the note, Goenka said he hoped this would be his first and last communication on this matter. He also acknowledged that Invesco had been a strong support to the company, for the most part. “It pains me to see this relationship going sour today and the unfortunate circumstances that we are all facing," he added.
He clarified that he was contending for preserving the future of Zee and not his position. “We should not let anyone impact the future of ZEE or diminish the shareholder value it has been consistently generating over the years," he said.
In a six-page letter to the stock exchanges earlier this week, Zee had disclosed a merger proposal with a “strategic group" earlier in the year.
Goenka claimed that after discussing for over a month with Invesco’s executives and with representatives of the unnamed Indian media group, he decided to reject the transaction.
The letter did not name the group but Invesco issued a separate statement saying the potential transaction proposed by “Reliance (the “Strategic Group" referenced but not disclosed in the 12 October 2021 communication by Zee) was negotiated by and between Reliance and Mr. 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."
In a separate statement, Reliance Industries Ltd said differences between Zee and Invesco over how the Goenka family would raise its stake in the broadcaster had led to a collapse in merger talks with RIL’s media properties.
The Mukesh Ambani-led company had proposed to merge its media properties with Zee in February after Invesco helped arrange discussions between Goenka and RIL’s representatives, adding that it regretted being dragged into a dispute between Zee and the US investment firm.
Goenka, in his note, said it was not in his demeanour to indulge in an ill-natured fight. “Such battles are best handled by legal experts," he said.
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