Reliance Industries Ltd (RIL) on Wednesday said it regrets being drawn into the dispute between Zee Entertainment Enterprises Ltd (ZEEL) and Invesco, and that the media reports about its role are not accurate.
In a statement, RIL said it respects all founders and has never resorted to any hostile transactions.
The company's clarification comes a day after ZEEL MD and CEO Punit Goenka -- who is also the son of Zee's promoter, Subhash Chandra -- alleged that Invesco had come with a proposal in February this year for a merger of ZEEL and certain entities owned by a large Indian group (strategic group) with inflated valuation "by at least Rs 10,000 crore".
While Goenka didn't mention the name of the strategic group, Invesco in a statement on Wednesday rejected his allegations and said the potential transaction proposed by Reliance was negotiated by and between Reliance and Goenka and others associated with Zee's promoter family.
RIL said Invesco assisted it in February in arranging discussions directly between its representatives and Goenka.
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"We had made a broad proposal for merger of our media properties with Zee at fair valuations of Zee and all our properties. The valuations of Zee and our properties were arrived at based on the same parameters," RIL said.
The Mukesh Ambani-led company said that its proposal sought to harness the strengths of all the merging entities and would have helped to create substantial value for all, including the shareholders of Zee.
"Reliance always endeavours to continue with the existing management of the investee companies and reward them for their performance. Accordingly, the proposal included continuation of Mr Goenka as Managing Director and issue of ESOPs to management, including Mr Goenka," it said.
However, differences arose between Goenka and Invesco with respect to a requirement of the founding family for increasing their stake by subscribing to preferential warrants. The investors seemed to be of the view that the founders could always increase their stake through market purchases, it said.
"At Reliance, we respect all founders and have never resorted to any hostile transactions. So, we did not proceed further," the statement further said.
Invesco, which along with OFI Global China Fund LLC, holds a 17.88 per cent stake in ZEEL, has been pressing for an EGM to discuss various issues, including the removal of Goenka. Promoter Subhash Chandra's family presently holds around 4 per cent stake in ZEEL, and, as per the merger announced with Sony Picture Networks India, it can go up to 20 per cent. Goenka would also lead the merged entity as MD for five years.
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