Zee responds to Invesco’s open letter and issues statement. Highlights here
Zee Enterprises, in its fiery response to Invesco’s open letter, said the shareholder’s actions in recent weeks, including open letters against the company and their general lack of transparency, are more than sufficiently motivated. to believe that they are motivated by concerns entirely foreign to any corporate governance issue.
Responding to Invesco’s request on the need to assess the deal with Sony, Zee said all shareholders, including Invesco, will have the opportunity to assess and review the deal with Sony.
“In the meantime, we urge Invesco to stop publishing half-truths about the proposed deal in the media and let the board and management work to finalize this deal,” Zee said in a filing.
Zee also responded to Invesco’s two specific objections to the proposed deal with Sony: on non-compete costs and increasing the sponsor’s 20% stake in the merged entity.
Regarding the non-compete fees levied by Invesco, Zee stated that the transfer of 2.11% of the shares of the merged entity to the Zee group would be a secondary transfer and would not be dilutive for any shareholder.
Regarding Invesco’s suspicion of increasing the stake of the promoter group to 20%, Zee said that the public announcement released by the company made it clear that the promoter’s family were free to increase their stake from the current 4%. at 20%, indicating that the promoter’s participation in the merged entity will be capped at 20%.
“There is no right granted to promoters to increase their participation and, therefore, specifying the ‘manner’ of such an increase is irrelevant.”
Criticizing Invesco for throwing unfounded slander on management, Zee said that five of the six existing independent directors on the board were appointed after Invesco’s investment in 2019 and that Invesco was consulted and that their views were positively taken into account at the time of these appointments.
Expanding on Invesco’s lack of transparency, Zee said, the shareholder did not disclose the fact that he was negotiating a deal on behalf of the company without any authority, even while criticizing Sony’s deal through the open letter.
“It was only after the company’s disclosure that Invesco felt the need to reveal the name of the strategic group in a press release and further downplayed its role in negotiating the proposed deal as simply being to facilitation. “
Earlier today, Reliance said it proposed a deal with Zee to merge media entities, but did not contemplate any hostile takeovers. The oil conglomerate has said it regrets being drawn into the dispute between Zee and Invesco.
Since the announcement of the deal with Sony, Zee and Invesco have been embroiled in a deep conflict, with Invesco demanding that Zee call an extraordinary general meeting (EGM) to remove the company’s chief executive and CEO, Punit Goenka. However, Zee refused to budge.
The National Company of Law Tribunal (NCLT) has given Zee Enterprises until Oct. 22 to file a response to Invesco’s plea for an EGM.
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