Invesco lashes out at Zee over Sony deal, urges shareholder to join dissent
- The option for the founders of Zee to increase their participation is “completely opaque”
- Says there is an urgent need to strengthen the independence of Zee’s board of directors
- Invesco calls for Zee board overhaul and CEO dismissal
- Invesco raised concerns about corporate governance failures
MUMBAI, Oct. 11 (Reuters) – U.S. investment firm Invesco publicly lambasted Indian television giant Zee (ZEE.NS) on Monday and objected to terms of its proposed merger with Japanese group Sony, asking the shareholders of the Indian company to support an attempt to reorganize its management.
Invesco funds (IVZ.N) own nearly 18% of Zee, and its first such public tirade increases pressure on one of India’s biggest TV groups just days after its founder accused Invesco to prepare a hostile takeover bid. Read more
Litigation centers around Invesco’s call to reorganize Zee’s board and remove its CEO, Punit Goenka, in light of corporate governance failures and financial irregularities, which were also reported this year by the regulator of the Indian market. Zee rejected Invesco’s request and says he has tightened up its processes.
In an open letter and press release, Invesco said the terms of a proposed Zee-Sony merger announced last month gave Zee’s founding family an opportunity to increase its stake to 20%, from 4%. , via methods which remain “totally opaque”. “.
Zee did not respond to a request for comment. Sony did not immediately respond to requests for comment outside of its regular business hours.
“This lack of clarity on the key aspects of the Zee-Sony announcement should be of concern to all shareholders … We currently see it as a cover-up on Zee’s part to distract and distract from the main issues.” , said Invesco.
We “will firmly oppose any strategic agreement structure that unfairly rewards selected shareholders, such as the promoter’s family, to the detriment of ordinary shareholders,” he added.
In addition to the hoped-for ousting of current Zee CEO Goenka, Invesco has suggested that six new independent board members be appointed at Zee. He has asked an Indian court to force Zee to call a meeting to consider his claims, and Zee has two weeks to respond. Read more
Invesco also called for the support of Zee shareholders in its letter on Monday, saying there was an urgent need to strengthen the independence of Zee’s board of directors.
During his television appearance last week, Zee founder Subhash Chandra, who is the father of CEO Goenka, asked Invesco to “behave like a shareholder and not like the owner,” adding “You want you beat, then I will retaliate “.
Invesco said in its statement that Zee resorted to “a reckless and desperate public relations effort.”
In recent weeks, Zee, who is a household name in the Indian television and film landscape, has found support from Bollywood stars, who have said on social media that they hope the crisis will end soon for the group.
Reporting by Abhirup Roy Additional reporting by Sankalp Phartiyal Editing by Aditya Kalra, Steve Orlofsky and Bernadette Baum
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