The Bombay Supreme Court on Tuesday upheld Invesco Developing Markets Fund’s appeal against the sole judge’s order, according to lawyers involved in the case.
A division bench of Justice SJ Kathawalla and Justice Milind Jadhav said Invesco’s proposed resolutions are not illegal and can be enforced.
The detailed copy of the verdict is awaited. The divisional bank had reserved its verdict two weeks ago.
On October 26, a single judge of Justice Gautam Patel issued a court order in favor of Zee Entertainment Enterprises Ltd., restricting Invesco from complying with its September request to convene an extraordinary general meeting.
Invesco and OFI Global China Fund LLC, both foreign institutional investors who together own a 17.88% stake in the media company, are engaged in a dispute with Zee Entertainment’s current Board of Directors and Managing Director and Chief Executive Officer Punit Goenka. The two funds want to remove Goenka and appoint six new independent directors through an EGM.
Invesco had made three main points in its appeal:
The Supreme Court did not have sufficient corporate jurisdiction to grant deferral of the EGM claim. It is the company court that is competent to decide on this.
Shareholders have an absolute right to call an EGM, Invesco had argued.
Shareholders’ right to remove directors at an advanced general meeting is not affected by the regulations or approvals of the Ministry of Information and Broadcasting.
Zee had responded by saying:
The jurisdiction of the National Company Law Tribunal is limited under the Companies Act. It does not have the legal authority to decide on questions related to claiming an EGM.
Acting on the claim to remove Goenka without prior approval from the MIB would result in Zee Entertainment losing its broadcasting license.
Independent directors cannot be appointed in violation of the Companies Act and SEBI regulations, which specify a procedure for the appointment and dismissal of a director.
Goenka’s lawyers had argued that there should be no time lag between the appointment of directors and the approval of the MIB. And that removing Goenka from the board of the company would violate SEBI’s listing rules.
This post Bombay Supreme Court Upholds Invesco’s Appeal Against Zee Entertainment was original published at “https://www.bloombergquint.com/business/zee-vs-invesco-bombay-high-court-upholds-invescos-appeal-against-zee-entertainment”