It’s now obvious that earlier this year, a proposal to merge Zee Entertainment Enterprises Ltd. with Reliance Industries Ltd.’s media firms was considered.
Punit Goenka alluded to such a proposal presented to him by officials of Invesco Developing Markets Fund in a letter to the Zee Entertainment board issued on Oct. 12. While he did not specifically reference Reliance Industries, he stated that he did not submit the plan to the board because it overpriced the Reliance firms and lacked full valuation details and commercial terms.
“Invesco’s actions over the past few weeks have been motivated by circumstances that are extraneous to the company’s business or performance, or issues of corporate governance or public interest,” the Zee Entertainment board said in a filing to the stock exchanges, referring to Goenka’s undated letter.
Goenka is the managing director and chief executive of Zee Entertainment, as well as the son of the company’s founder, Subhash Chandra. The filing was accompanied by his letter to the board. In response to his letter, Invesco published a statement rejecting Zee Entertainment’s claims made in its October 12 release.
“We want to be clear that the potential Reliance acquisition (the “Strategic Group” mentioned but not revealed in Zee’s Oct. 12, 2021 announcement) was negotiated by and between Reliance and Mr. Goenka and others linked with Zee’s promoter family. As Zee’s single largest shareholder, Invesco’s involvement was limited to assisting with the proposed deal.”
Invesco holds 17.88 percent of Zee Entertainment, together with affiliate OFI Global China Fund. It is currently embroiled in a court battle with Zee Entertainment and its board of directors over its attempts to dismiss Goenka and appoint six new independent directors to the board. The two foreign funds have requested that these proposals be put to a vote at an extraordinary general meeting of shareholders. The EGM request was turned down by the company’s board of directors. The case is currently in court.