The controversy comes at a difficult time for one of India’s largest news and entertainment TV conglomerates as it recently started merger talks with Sony.
India’s Zee Entertainment is locked in a legal battle with one of its biggest foreign investors, Invesco, after it called for the removal of the TV network’s CEO citing concerns about corporate governance.
Zee has said that it has tightened its governance procedures. But the controversy comes at a difficult time for one of India’s biggest news and entertainment TV groups as it recently began Japan’s Sony Group Corp. merger talks with the local unit of.
Here’s what the Invesco-Zee controversy is about:
What are Invesco’s demands?
Invesco’s legal filings reviewed by Reuters that are not public seeks changes to Zee in light of corporate governance and financial irregularities that have plagued the company, and even flagged by India’s markets regulator has gone.
Invesco’s Developing Markets Fund and its OFI Global China Fund LLC hold about 18% stake in Zee. He has suggested the appointment of six new independent board members and Remove Zee’s current CEO Punit Goenka.
Invesco told to call Zee on September 11 “Extraordinary General Meeting” To consider the demands of the shareholders.
How does Zee look at the demands of Invesco?
on 1st October Invesco’s request for board reforms rejected, adding that the move had legal loopholes.
Invesco then took the fight to the Companies Tribunal in India, where it is trying to force Zee to call a meeting, saying Zee’s behavior is “oppressive”. As per the tribunal’s order, Zee has two weeks to respond on 8 October.
The Indian TV giant says it has implemented corrective plans to address the concerns raised by the market regulator and it adheres to “highest standards of governance”.
It is unclear how shareholders will vote when the meeting is called, but Zee founder Subhash Chandra, CEO Mr. Goenka’s father, has accused Invesco of hatching a hostile takeover plot.
“They want to take over the company against Indian laws,” Mr. Chandra has said. Invesco has not commented on the allegation.
Is the Zee-Sony deal in danger?
While Invesco was pushing for Zee shareholder meeting, the Indian giant announced merger talks with Sony. The terms of the deal say Mr. Goenka plans to remain CEO of the merged entity, which will be mostly owned by Sony.
Invesco has told an Indian tribunal hearing that it is not against the Zee-Sony plan, but its filing criticizes how the two interacted.
Invesco said the Sony deal would allow Mr. Chandra’s family to increase their stake from 4% to 20%, adding that it was “an attempt to simply divert the attention of the general public” and that a shareholder meeting was held. The event had to be stopped.
Zee Prime-Time Appeal, Bollywood Support
In an unusual public satire, Mr. Chandra made a prime-time TV appearance on Zee’s Hindi news channel this week.
“I urge Invesco to treat Invesco like a shareholder not like an owner… you want a fight, then I’ll fight back,” Mr. Chandra said, tearfully, as he spoke about Zee’s journey in India. I talked.
Zee, which over the years has introduced dozens of entertainment channels and shows in several local languages in India, is a household name. It is now getting the support of Bollywood.
Filmmaker Boney Kapoor said on Twitter, “Zee which was earlier an Indian channel promoted by an Indian nationalist… (now) followed by American and Chinese investors. Praying Zee Entertainment lives on in the passionate hands of the original Indian entrepreneur.”
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