The Company informed exchanges of having receipt a letter from shareholders owning 17.88% of the Company – Invesco Developing Market Fund and OFI Global China Fund LLC.
The letter sought for calling an Extraordinary General Meeting (EGM) proposing some significant management changes –
- Removal of Mr Puneet Goenka – the Promoter Managing Director
- Removal of Mr Manish Chokhani and Mr Ashok Kurien – the Non-Executive Non-Independent directors
- Appointment of 6 new independent directors – Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli and Gaurav Mehta
The kind of proposed management overhaul is unheard of in Indian context.
Key points to note –
- Promoters (Subhash Chandra family) own just 3.99% of the Company – having diluted stake to repay debt of various promoter entities. Almost 86% of the Company is owned by foreign and domestic institutions.
- Proxy advisory firm Institutional Investors Advisory Services (IiAS) also advised shareholders to vote against the two directors (Chokhani and Kurien) due to various corporate governance lapses under their watch – losses on related party transaction, approval of 46% pay hike to the MD in FY 21 (higher than shareholders’ approval in 2020 AGM and also when employees were given no raise in FY21).
- Mr. Chokhani and Mr. Kurien submitted their resignation before the scheduled AGM on September 14, 2021.
The Company informed that it is examining the letter and would take necessary action as per applicable law.
It would be interesting to ‘watch’ how this pans out.
Update March 24, 2022
After more than 6 months of fighting with Zee on the EGM request, Invesco suddenly decides to withdraw the request.
This is especially surprising given that just on the previous day it had won an appeal against Zee in the Bombay High Court to call for an EGM.
Reason given for the withdrawal – the proposed Zee and Sony merger would achieve its aim of strengthening the board oversight. Though it also said that if the deal is not done as proposed, Invesco retains the right to call a fresh EGM.
My take – I have no clue what transpired before and what changed now as the merger deal is not new, was announced long back and still Invesco had decided to continue the fight. So why the sudden change of heart?