Zee-Invesco case: NCLT Says Zee Board Must Call EGM
Moneylife Digital Team 30 September 2021
The National Company Law Tribunal (NCLT) has ruled that the board of Zee Entertainment Enterprises (ZEE) has to consider the key shareholders’ request and call an extraordinary general meeting (EGM) in accordance with the law.
Invesco Developing Markets Fund, which along with OFI Global China Fund LLC holds a 17.88% stake in ZEE, had approached the NCLT on 29th September.  The move came around two weeks after it had demanded an EGM to push for the ouster of the company's three directors including managing director (MD) and chief executive officer (CEO) Punit Goenka.
The NCLT, while hearing Invesco's plea, observed that it is the 'mandate of the law' that ZEE should call for the EGM. During the hearing, the Tribunal added that it is not a discretionary power of the board to call or not call for EGM.
The board does not have any right to deny an EGM sought by shareholders having one-tenth of the total shareholding, the tribunal explained. NCLT also said that ZEE board should communicate decisions appropriately to shareholders after board meet.
The Tribunal is scheduled to hear the matter again on 4th October.
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