Zee-Sony merger: Invesco to not pursue EGM requisition; supports merger

Invesco Developing Markets Fund, that holds nearly 18 per cent in Zee Entertainment, stated on Thursday that it will not pursue the EGM requisition dated September 11, 2021. It also reiterated its support for the Zee-Sony Pictures Networks India merger as currently proposed. Invesco’s requisition notice had sought the removal of MD, CEO Punit Goenka from the Zee board.

“Since we announced our intention to requisition an EGM and add six independent directors to Zee’s Board of Directors, Zee has entered into a merger agreement with Sony. We continue to believe this deal in its current form has great potential for Zee shareholders. We also recognise that, following the merger’s consummation, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company. Given these developments, and our desire to facilitate the transaction, we have decided not to pursue the EGM as per our requisition dated 11 September 2021,” the company said in a statement. 

It added that Invesco will continue to monitor the progress of the proposed merger. If the merger is not completed as currently proposed, Invesco will retain the right to requisition a fresh EGM, it said. 

This development comes a day after the Bombay High Court’s decision recognising Invesco’s requisition for an extraordinary general meeting as legally valid and upholding its right to requisition an EGM at Zee. 

The investor, in its requisition, had asked the Zee board to conduct an EGM of shareholders to vote on the removal of Goenka and two other independent directors. It had also sought the induction of six new independent directors. Zee rejected the requisition and moved the court, securing an injunction, which was challenged by Invesco.

Invesco said that the Bombay High Court’s ruling reaffirms the shareholder rights and the mechanisms under Indian law to uphold boards accountable to their shareholders. “The ruling is a boon for corporate governance in India and a win for shareholder democracy,” it added. 

Also read: Sony-Zee merger: Punit Goenka to lead merged entity; all details here

Also read: Zee-Sony merger approved by Zee Entertainment board