Invesco reiterates demand to oust Punit Goenka from Zee Entertainment

Invesco said newly constituted board supported will be best suited to evaluate and oversee potential for strategic transactions like the one announced on September

Invesco Fund, which owns 18 per cent of Zee Entertainment Enterprises,  has reiterated its demand to oust Punit Goenka, current CEO and MD, from the board and induct its six nominees on Zee board.

In a letter to the ZEEL board, Invesco said the newly constituted board supported with the strength of independence will be best suited to evaluate and oversee potential for strategic transactions like the one announced on September 22 with Sony, as well as to make determinations on the future leadership of the company. 

When contacted, a ZEEL spokesperson said: "The Board is seized of the matter. The Company will take the necessary action as per applicable law."

Invesco & Oppenheimer said disclosure of September 22 2021 by Zee Entertainment with respect to the Sony deal, is symptomatic of the erratic manner, in which important and serious decisions have been handled at the company, Invesco said, as per TV reports.

In its letter, Invesco said it is an investor in ZEEL for over 10 years and continues to believe that the business is valuable, whether on its own or in strategic alignment with partners such as Sony. The letter has been reviewed by Business Standard.

"However, decisions of material strategic import must follow and not precede actions towards establishment of a proper and independent governance structure as determined by the company's shareholders. In this context, and against the backdrop of our EGM requisition, your disclosure of  September 22, 2021, is symptomatic of the erratic manner in which important and serious decisions have been handled at the company," it said.

Invesco said to protect shareholder value and in the exercise of its statutory rights as an ordinary shareholder, it had called upon the company to hold an EGM, and it was Board's duty under company law to now do so. "At this EGM, shareholders of the company will decide the composition of the company's board of directors in a free and democratic manner," it said.

Towards this end, Invesco has proposed the removal of non-independent directors and recommended six additional independent directors for shareholders to consider and vote on, and in the process constitute a purely and genuinely independent board of directors. "These six additional independent directors come from diverse backgrounds and are expected to bring additional professionalism, guidance, and standards of governance to the operations of the company," the fund said. 

"Together with the existing set of independent directors, we believe the company's board will have the depth to navigate the company into the future.

A newly constituted board supported with the strength of independence will be best suited to evaluate and oversee the potential for strategic transactions, like the one announced on September 22, 2021, on a non-binding basis, as well as to make determinations on the future leadership of the company," it said.

"We note that the disclosure of  September 22 2021 refers to the future board composition of the company at a time when the current composition of the Board is subject to a shareholder vote on the back of our EGM requisition," it said.