Urges stay of NCLT proceedings till appellate tribunal passes an order
In a fresh twist, Zee Entertainment Enterprises (ZEEL) on Wednesday moved the National Company Law Appellate Tribunal (NCLAT)seeking “more time” to file its reply with regard to the petition filed by its shareholder Invesco Developing Market Funds for convening the extraordinary general meeting of the company (EGM). The company has also sought stay of the proceedings at the National Company Law Tribunal, till the appellate tribunal gives its final order. The petition is expected to come up for hearing before the NCLAT on Thursday.
The move follows a direction by the NCLT on Tuesday asking ZEEL to file its reply within two days, meaning by October 7. The NCLT had said a “simple counter reply” was needed in response to the counsels for ZEEL seeking more time.
“The company has moved NCLAT in accordance with the due process available under the law. The company had also filed a suit in Bombay High Court to declare that the requisition notice sent by Invesco Developing Markets Fund and OFI Global China Fund LLC as invalid. The company continues to have full faith in the Indian judicial system and will take all the necessary steps that are in the best interests of all its shareholders,” a company spokesperson said.
Invesco Developing Markets Funds and its subsidiary OFI Global China Fund had moved NCLT after ZEEL declined to honour its September 11 requisition to hold an EGM to evict certain directors.
The foreign portfolio investors, that together hold a 17.88% stake in ZEEL, had sought the ouster of ZEEL chief executive officer and managing director Punit Goenka and two non-executive directors, alleging breach of corporate governance norms. It has also sought induction of six of its nominees on ZEEL’s board.
On Tuesday, Janak Dwarkadas, the counsel for OFI Global China Fund, had reiterated his earlier stance that ZEEL moving the Bombay High Court is a classic case of “forum shopping”. This was in reference to the company moving various courts, NCLT and Bombay High Court.
ZEEL counsel and senior advocate Navroz Seervai argued before the tribunal that the requisition for EGM has to be dismissed by NCLT, as an injunction can only be granted in “rare and extraordinary cases”. He also said that the foreign investors were seeking ad-interim relief as a final relief, which can be granted only after the full hearing of the case.