Companies’ court appellate tribunal NCLAT on Thursday granted a breather to Zee Entertainment in its fight against foreign institutional investors by stating the National Company Law Tribunal (NCLT) committed an error by not granting the media company sufficient time for filing reply to Invesco’s plea to convene an EGM.
The National Company Law Appellate Tribunal (NCLAT) is a superior body than NCLT.
The NCLT has been directed by the appellate tribunal to allow Zee reasonable and sufficient opportunity to file reply.
“It is clear that the Learned NCLT has committed an error in not granting reasonable and sufficient time for filing a reply, which is a complete violation of Rule 37 of NCLT Rules and Principles of Natural Justice.
“Therefore, in the circumstances…we are of the opinion that reasonable and sufficient opportunity should be given to the Appellants (Zee) for filing a reply,” the NCLAT ruling stated.
The order further stated: “It is pertinent to mention that Section 98 of the Companies Act, does not prescribe any time limit or limitation on the Learned NCLT to pass order within that time limit. Engrafting the provisions of Section 100(4) in Section 98 would be wholly misconceived and untenable.
“Undisputedly, the reliefs sought in the Company Petition are specifically under Section 98 of the Companies Act. Given that Section 98 does not prescribe any time limit, the Learned NCLT ought to have granted reasonable time to the Appellant (Zee) to file a reply.”
On Tuesday, a panel of the National Companies Law Tribunal (NCLT) in India’s financial capital of Mumbai had set an October 7 deadline for Zee to reply to the two investors’ case regarding the meeting of shareholders.
A source directly aware of the matter had told Reuters that Zee had gone to the higher NCLAT tribunal because it had not been given enough time to reply.
Zee push back is against the demand by Invesco Developing Markets Fund and OFI Global China Fund LLC, which together account for 17.88 percent of its shares. Invesco has demanded an EGM seeking sweeping changes in the Zee Board and leadership team, including its MD and CEO Punit Goenka.
Meanwhile, as reported by Indianbroadcastingworld.com yesterday, Zee TV founder Subhash Chandra had stridently questioned
investor Invesco’s motives and had also hinted at a Chinese hand behind the takeover bid of the Indian company that was rooted in local ethos and culture.
Appearing prime time Wednesday evening on Zee News channel and its siblings, Chandra, while terming Invesco’s moves and demands “illegal”, said that Zee Entertainment did not belong to him or his son Punit Goenka (whose ouster was being demanded by the foreign investors among other changes), but to the 250,000 small shareholders and over 900 million people who watch and enjoy Zee TV’s programmes.
And, it’s these 250,000 shareholders who would decide what’s good for Zee — the Invesco deal or a merger with Sony Pictures Networks India (SPNI) — Chandra asserted while talking to the 9 pm show’s host.
The battle-scarred founder, whose family now owns a mere 3.9 percent stake in the company that Chandra founded, along with associates, 29 years ago, stressed that he was sure Invesco as an investor-company would not run Zee on a day to day basis, but would hand it over to some other company. “Let Invesco be transparent as to what the actual deal is all about,” Chandra said, adding if the investors are so interested in a change, let them make an “open offer” to the shareholders.