(Bloomberg) -- Invesco Developing Markets Fund petitioned an Indian tribunal against Zee Entertainment Enterprises Ltd. and three directors including Chief Executive Officer Punit Goenka, escalating a tussle that may complicate Sony Group Corp.'s attempt to takeover India's largest private-sector television network.
A listing on the website of the National Company Law Tribunal doesn't yet say when the case would be heard. The petition requests the tribunal to order an extraordinary general meeting of Zee, the Indian company said in an exchange filing.
The petition follows a Sept. 23 letter to Zee's board, in which Invesco reiterated its demand for an EGM to remove non-independent directors and introduce six additional independent ones. The petition against Goenka, Chairman R. Gopalan and Director Vivek Mehra was filed Wednesday jointly with OFI Global China Fund LLC which, together with Invesco, holds about 18% stake in Zee.
“This has officially moved the dispute from the board room to the court room. Of course, whatever the order issued by NCLT the same may be appealed with appellate tribunal,” said Anupam Shukla, counsel at legal consultancy Pioneer Legal. “Both parties will also have opportunities to try and amicably resolve this dispute through mutual discussions.”
Zee is focused on enhancing shareholder value and is in the process of taking the required steps within the statutory period, its representative said by email, declining to comment on “impulsive or premature steps” by the funds. There are no expected financial implications on the company as a result of the petition, except legal costs, Zee said in the exchange filing.
Sony Group Corp.'s Indian unit last week signed a non-binding offer to buy Zee. The companies said they're entering a 90-day period of exclusive talks during which they'll conduct mutual diligence and negotiate a binding agreement. About 53% of the merged entity would be owned by Sony India shareholders and the rest by Zee's holders, and Sony would nominate a majority of the board.
Invesco and OFI said the deal was struck in an “erratic manner.” They added that “a newly constituted board supported with the strength of independence will be best suited to evaluate and oversee the potential for strategic transactions.”
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