American investment firm Invesco Developing Markets Fund has decided not to pursue its request for an extraordinary general meeting (EGM) of Zee Entertainment Enterprises Ltd. This comes even as the Bombay High Court had allowed Invesco to go through with the EGM. However, Invesco said that the proposed merger between Zee and Sony addressed most of the concerns around the company’s management.
“We are pleased with the Bombay High Court’s ruling, which we view as an important reaffirmation of shareholder rights in India and the mechanisms under Indian law to hold Boards accountable to their shareholders. The ruling is a boon for corporate governance in India and a win for shareholder democracy,” said the US-based investment fund in a statement.
‘Win for corporate governance’
“However, Invesco recognises that after the merger between Zee and Sony is completed, the board of the newly combined company will be substantially reconstituted, which will achieve their objective of strengthening board oversight of the company,” it added.
“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,” Invesco said.
In their September request for an EGM, Invesco was seeking the removal of CEO and MD Punit Goenka from the ZEEL board.
Invesco will continue to monitor the merger closely, and if the merger is not completed as it is currently proposed, it reserves the right to call for a fresh EGM.
Zee Entertainment said it welcomes the decision by Invesco for “its belief in the true potential of the proposed merger with Sony Pictures Networks India (SPNI) and for its faith in the management’s approach.”
“ Invesco has been an integral part of ZEE’s value-creation journey for almost two decades; and the Company acknowledges this support.,” it said.