Explanation-Why is Invesco involved in a legal dispute with Indian TV giant Zee


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FILE PHOTO: A guard stands next to a Zee TV banner outside a film studio in Mumbai, India September 24, 2021. REUTERS / Francis Mascarenhas

NEW DELHI (Reuters) – Zee Entertainment in India is engaged in a legal battle with one of its largest foreign investors, Invesco, after calling for the ouster of the TV network CEO citing concerns about the corporate governance.

Zee said he has tightened his governance processes. But the dispute comes at a difficult time for one of India’s largest news and entertainment television groups, as it recently began merger talks with the local unit of Japanese group Sony Group Corp.

Here’s what the Invesco-Zee dispute is about:


Invesco’s legal documents reviewed by Reuters – which are not public – show it wants changes at Zee in light of corporate governance and financial irregularities that have plagued the company, and have even been reported. by the Indian market regulator.

Invesco’s Developing Markets Fund and its OFI Global China Fund LLC have an almost 18% stake in Zee. They suggested the appointment of six new independent board members and the removal of Zee’s current CEO, Punit Goenka.

Invesco asked Zee on September 11 to call an “extraordinary general meeting” of shareholders to consider its demands.


On October 1, Zee rejected Invesco’s request to reorganize the board, saying the move involved legal infirmities.

Invesco then took the battle to Indian companies court, where it attempts to force Zee to call the meeting, claiming Zee’s behavior is “oppressive.” Zee has two weeks to respond, according to a court order on Friday.

The Indian television giant claims to have implemented corrective plans to address concerns raised by the market regulator and meet “the highest standards of governance”.

It’s still unclear how shareholders will vote if a meeting is called, but Zee founder Subhash Chandra, father of CEO Goenka, accused Invesco of plotting a hostile takeover bid.

“They want to take the business back against Indian laws,” Chandra said. Invesco has not commented on the allegation.


As Invesco lobbied for a meeting of Zee shareholders, the Indian giant announced its merger talks with Sony. The terms of the deal indicate that Goenka plans to continue as CEO of the merged entity, which will be majority-owned by Sony.

Invesco said during Indian court hearings it was not against the Zee-Sony plan, but its case criticizes the way the two started talks.

The deal with Sony would allow Chandra’s family to increase their stake to 20% from the current 4%, Invesco said, adding that it was “just an attempt to distract the general public.” and delay calling a meeting of shareholders.


In an unusual public rant, Chandra made a prime-time TV appearance on Zee’s Hindi news channel this week.

“I urge Invesco to behave like a shareholder and not like the owner… You want to fight, then I will fight,” Chandra said with tears in her eyes as she spoke of Zee’s trip to India.

Zee, which for years has offered dozens of entertainment channels and shows in many local languages ​​in India, is a household name. He now finds support from Bollywood.

“Zee, which was the first Indian channel promoted by Indian nationalists… (is) now hunted down by American and Chinese investors. Pray Zee Entertainment remains in the passionate hands of the original Indian entrepreneur, ”film producer Boney Kapoor said on Twitter.

Reporting by Aditya Kalra and Abhirup Roy. Editing by Gerry Doyle

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