MUMBAI :
Essel Group founder and chairman Subhash Chandra on Tuesday questioned US investor Invesco’s motive behind seeking a change in the Zee Entertainment Enterprises Ltd board.
In his first public comments on the tussle between Zee and its largest shareholder on his television channel WION, Chandra urged Invesco to disclose the rationale behind its demand for recasting the company’s board, including the ouster of his son and managing director Punit Goenka.
“Invesco is a good investor. But they are not saying transparently why they want a change in the board. You want to remove Punit Goenka. But who will run the company? Have you entered into any deal with anyone?” he asked.
Invesco, which owns 17.88% through Invesco Developing Market Fund and OFI Global China Fund Llc, has been unhappy with how Chandra and Goenka, who together hold 3.99%, have been running the company.
A spokesperson for Invesco in India didn’t immediately return a phone call seeking comment.
On 11 September, Invesco first wrote to Zee demanding a special shareholders’ meeting to discuss an overhaul of the board, citing corporate governance issues. This was followed by Zee announcing a $1.5 billion merger with Sony’s India unit on 23 September, but no extraordinary general meeting (EGM) as requested.
Invesco then approached the National Company Law Tribunal (NCLT) against Zee for failing to announce a date for the EGM. The tribunal is currently hearing the matter.
Chandra said Zee shareholders should be given a chance to decide whether they want to go with the Invesco deal or the Sony deal. He suggested that it is the regulator’s responsibility to ask Invesco to disclose its intent.
“Regulators’ prime responsibility is to protect the interest of minority shareholders. They also have to ask Invesco to come out transparently. They should make sure that minority shareholders have both the things in hand, whether to vote for Sony deal or Invesco deal, which they have not put out,” he said.
Chandra also said that he and his friends had given “blood and sweat” to Zee over 30 years. “We need an investor who will ensure that the company prospers and shareholders benefit. This will neither be a gain or loss to me,” he added.
Source: Live Mint