The Bombay High Court on Tuesday temporarily restrained Zee Entertainment Enterprises’ top investor Invesco from calling a shareholder meeting, in a win for the TV network that sent its shares higher.
U.S. investment firm Invesco, which owns almost 18% of Zee via two funds, wanted an extraordinary general meeting (EGM) of shareholders in a bid to oust the Indian company’s CEO Punit Goenka and suggested that six new independent board members be appointed.
The nomination of individuals for the board does not speak well of their independence, Justice G.S. Patel of the Bombay High Court observed, adding that Invesco’s notice to remove Mr. Goenka “without proposing a replacement puts Zee into a statutory black hole.”
“Sometimes, it happens that a company must be saved from its own shareholders, however well-inten tioned,” Justice Patel said.
Zee’s shares ended 4.3% higher after the Bombay High Court’s order.
Zee and Invesco did not respond to requests for comment. The court last week proposed that Zee call a shareholder meeting, but ruled in favour of the Indian TV network on Tuesday following arguments by its lawyer.
Invesco’s calls for a shake up at Zee over corporate governance comes as the firm is planning a merger with the local unit of Japan’s Sony Group.
That move is set to create India’s biggest broadcaster but Invesco has raised concerns about options given to Zee’s founding family, that includes its CEO Goenka, to raise their stake in the merged entity to 20%. The founding family of Zee currently owns 4% of its shares.