The Bombay High Court on October 26 offered relief to Zee Entertainment by granting an instruction against its Invesco’s call for an extraordinary general meeting (EGM).
“The Bombay HC has restrained Invesco from taking any action in headway of their importunity notice (to call an EGM),” said Nirav Shah, a mate at law establishment DSK Legal.”The court will now have to decide whether the importunity notice is valid or not on the grounds raised by Zee and until the Bombay High Court decides this, the meeting requested by Invesco can not be held,”he explained.
“There will be an instruction in terms of prayer clause (a) of the Interim Operation, restraining DefendantsNos. 1 and 2 ( including their workers, agents and anyone acting by, through or under them) from taking any action or step in headway of the Importunity Notice dated 11th September 2021, including calling and holding an EGM under Section 100 (4) of the Companies Act, 2013,”the court said in its October 26 order.
The court observed that directing Zee Entertainment to call an EGM would be potentiallynon-compliant. It further said that there’s a abecedarian excrescence in Invesco’s construct.
“Invesco assumes that judgments at EGM are ever special, more sacrosanct than judgments proposed by the board,”it said.
Zee had sought instruction against Invesco from taking any action or way as part of its importunity notice including calling and holding an EGM.
On October 22, the court reserved its order in the matter when Zee had argued that the call for an EGM by its largest shareholders Invesco and OFI Global was illegal and invalid.
Invesco wanted to remove Zee Entertainment Managing Director and Chief Executive Officer Punit Goenka and appoint six independent directors on the board of the company.
Gopal Subramanium, the counsel for Zee Entertainment, said the board of a listed company needs an optimum balance between superintendent andnon-executive directors. The change that Invesco wanted to bring in would master that purpose. Zee also noted that a previous authorization was demanded from the Ministry of Information and Broadcasting to make any similar change.
Kapil Sibal, appearing for Goenka, argued that the company would not be suitable to serve if its MD and CEO were removed.
Invesco’s counsel Janak Dwarkadas said they’ve a statutory right to call for an EGM and that they satisfied both numerical and procedural need to call an EGM. He said that they need a numerical demand of one-tenth of equity share cap to call for EGM, pointing towards the17.88 percent stake held concertedly by Invesco and OFI Global.
Dwarkadas also said that they’ve moved the National Company Law Tribunal (NCLT) and the bench has the power to decide on this case.
He said that they need a numerical demand of one-tenth of equity share cap to call for EGM, pointing towards the17.88 percent stake concertedly held by Invesco and OFI Global.
Dwarkadas also said that they’ve moved the National Company Law Tribunal (NCLT) and the bench has the power to decide on this case.
A day previous to reserving its order, the court had asked Zee to call an EGM but added that the EGM resolution had to be kept in latency till it decided on the legitimacy and validity of therequisition.The court had also said that the EGM will be chaired by a retired judge, adding that the resolution will be subject to the blessing from the Ministry of Information and Broadcasting (MIB).
While Subramanium had told the court during the October 21 hail that the company will inform the date of the EGM the coming day, on October 22, he reiterated that Invesco’s call for the EGM was invalid.
