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Business EconomyPosted at: Oct 11 2021 9:24PM


Invesco writes open letter to shareholders, insist for EGM and removal of CEO

New Delhi, Oct 11 (UNI) The boardroom battle at Zee Entertainment Enterprises Ltd (ZEEL) intensified further with Invesco, the largest shareholder with an ownership interest of nearly 18 per cent, releasing an open letter on Monday to shareholders reaffirming its resolve to rejig the board and remove CEO and Managing Director Punit Goenka.

Invesco in a press release said that there was an urgent need for strengthened independence on Zee’s Board and welcomed all potential strategic alignments but expressed concerns over any transaction terms which 'enrich Zee’s founding family at the expense of ordinary shareholders.'

Invesco alleged that the leadership of Zee had resorted to a reckless public relations campaign in response to the overwhelming demand from shareholders for leadership changes at the company.

“These actions and rhetoric are aimed at avoiding true accountability for the governance lapses and shareholder value destruction that the current leadership and Board have presided over. We are calling on Zee shareholders to join us in asking why the founding family, which holds under 4 per cent of the company’s shares, should benefit at the expense of the investors who hold the remaining 96 per cent," said Justin Leverenz, Chief Investment Officer, Invesco Developing Markets Equities.

The open letter said that Zee’s incumbent board and management have demonstrably destroyed shareholder value.

"On the eve of Invesco’s EGM requisition on 11 September 2021, Indian stock market indices had more than doubled in the preceding five years, while Zee’s stock had more than halved in the same period," it said.

The letter said that recent actions of Zee’s leadership and Board further confirm a deep apathy to shareholder rights.

With the company rejecting Invesco's call for the EGM, Invesco has filed an appeal in National Company Law Tribunal (NCLT) seeking an order to hold the EGM. In response to this ZEEL approached National Company Law Appellate Tribunal (NCLAT) and secured time for filing its reply to the company court.

In the open letter, Invesco said that it was disappointed with the functioning of the current Board of Zee and sought timely and appropriate action on the part of the independent directors.

It further said that the events of the last few days have reinforced its suspicion that the current management and Board of Zee appear unwilling to hear the voice of ordinary shareholders.

"In conclusion, we want you to know that we share the disappointment and frustration of the last few years with all other long-standing shareholders of Zee. Our actions have been and will continue to be directed towards our common interests in the long-term value of Zee," it said.

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Tags: #Invesco writes open letter to shareholders# insist for EGM and removal of CEO
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