Punit Goenka, the eldest son of Zee’s founder Subhash Chandra, was expected to be the new CEO at the merging Zee Entertainment/Sony Pictures entertainment giant. However, an existing major shareholder in Zee, Invesco Fund with an 18 per cent stake, is objecting and has called an Extraordinary General Meeting (EGM) to pursue not only a newly constituted board of directors but an alternative CEO to Goenka.
In a letter to the Zee board, Investec calls for a newly constituted board of directors at the enlarged company. But this demand is in direct opposition to the way the merger was agreed between Zee and Sony.
In the letter, Invesco referred to the (non-binding) merger agreement and says: “Your disclosure of 22 September 2021 is symptomatic of the erratic manner in which important and serious decisions have been handled at the Company”. Invesco did not reject the deal negotiations with Sony and highlighted in the letter that the business of ZEEL is valuable, “whether on its own or in strategic alignment with partners such as Sony”.
Investec says that an EGM would protect shareholder values.