NEW DELHI: None of the sides in the Zee Entertainment versus Invesco tussle seem to be in a mood to relent. After Zee Entertainment promoters – Subash Chandra – last week went public with his attack on minority shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC, Invesco in an all-out attack said that the founding family, which holds under 4% of the company’s shares, is benefitting at the expense of 96% shareholders.
In an open letter to shareholders of Zee, Invesco Developing Markets Fund reiterated its demand for an Extraordinary General Meeting (EGM) as it stressed on the need for a demarcation between the promoter family and the institution. The letter also said that there is a need for the Board to be strengthened with independent directors who take their jobs seriously, who robustly debate vital decisions and who serve as guardians of all shareholder interests.
“The Invesco has been a significant shareholder in Zee Entertainment Enterprises for over a decade and that it is disappointed that the leadership of Zee has resorted to a reckless public relations campaign in response to the overwhelming demand from shareholders for leadership changes at Zee,” said Justin Leverenz, Chief Investment Officer, Developing Markets Equities.
Invesco has also expressed its concern over Zee and Sony Pictures merger deal, which it says is wholly opaque. It says the current terms of the Sony-Zee announcement gift additional 2% equity to the founding family via a non-compete that seems entirely unjustified, while also providing a pathway for the founding family to raise its stake from 4% to 20%. “Any transaction will be evaluated in a constructive spirit if and when full details are made available,” it says.