When the matter came up in front of the Mumbai bench of NCLT, senior advocate Navroz Seervai, appearing for the entertainment company said, “I oppose this petition on several jurisdictional issues and issues of maintainability. We feel that the tribunal doesn’t have jurisdiction to hear this petition. We will argue when our turn comes but wanted to clarify this since these issues are very important. We will argue on this when the tribunal feels it necessary.”
The tribunal is hearing a petition filed by Invesco-owned – Invesco Developing Markets Fund and OFI Global China Fund – seeking a direction to convene an extraordinary general meeting (EGM) of the company for removal of its MD Punit Goenka from the board and induction of six new independent directors.
However, the division bench led by Bhaskara Pantula Mohan and Narender Kumar Bhola had to adjourn the matter to Tuesday due to disruption in the hearing due to a power cut in New Delhi, where one of the tribunal member resides.
Prior to the interruption, Mukul Rohtagi, senior advocate appearing for the Invesco, argued that in their last week’s argument, it was their submission that the company may not follow the rule and that is why they had approached the tribunal and their concern turned out to be correct.
“The decision to reject our requisition to call for an EGM is malafide. They (ZEE board) can’t judge our requisition but under the law, when a shareholder with over 10% voting rights calls for such a meeting, the company is bound to call for such EGM within 21 days,” argued Rohatgi. “If they don’t call such a meeting then I can either come to NCLT and seek such direction, or even I can call shareholders meeting. The mandate is very clear.”
Supporting these arguments, senior advocate Janak Dwarkadas argued that last time the counsel for the company had said that they will call for a board meeting of independent directors and that he was unable to pre-judge what the decision will be. “But what we are not finding is that the company is indulging in forum shopping,” he said.
ZEE on October 1st declined Invesco’s requisition to hold and EGM after concluding that the notice was “not valid due to multiple legal infirmities”.
ZEE board said that the decision was reached after seeking counsel from multiple legal experts, including retired Supreme Court judges and independent senior counsels.
Later, on Saturday, ZEE said it has filed a civil suit in the Bombay High Court against Invesco to declare that Invesco’s demand for an EGM to vote on removal of Goenka and induction of new board members is “illegal and invalid”.
Law firm Dhruve Liladhar & Co representing Invesco and OFI Global China Fund in this case. While law firms Trilegal and the Economic Laws Practice (ELP) are representing ZEE and Goenka in the case.
