MUMBAI: The Bombay High Court on Friday reserved its order on Zee Entertainment Enterprises Ltd's (ZEEL) plea after the media company said it was unwilling to hold an extraordinary general meeting (EGM) of shareholders as requested by Invesco, its largest shareholder.
A single bench of the high court presided over by Justice G S Patel had on Thursday asked the media company if it was willing to hold such a meeting.
On Friday, senior counsel Gopal Subramanium, who appeared for ZEEL, informed the court that the company's board of directors could not grant permission for something that could turn out to be "illegal".
Subramanium said that "clouds of concern had appeared on the horizon", following the court's query posed in the previous hearing and the ZEEL board had decided against holding an EGM.
Invesco Developing Markets Fund and OFI Global China Fund, the largest investors of ZEEL, had sent a requisition to the company on September 11 to call for an EGM for the removal of MD and CEO Punit Goenka and two other non-independent and non-executive directors from the company's board.
It had also sought the induction of six new independent directors.
ZEEL, however, moved the high court on October 2, seeking that the court declare the requisition notice sent by Invesco as illegal and invalid.
On Friday, Subramanium told the court, "If the board of directors are compelled to carry out the requisition, then it would be violative of other provisions of laws."
He further stated that the existing legal provisions permitted the board of directors to reject a requisition for an EGM if it had reasons to believe that the objective of such meeting was illegal.
Senior counsel Kapil Sibal, who appeared for Goenka, questioned what would happen to the mandate if these resolutions were passed and Goenka was removed, and said that the board could not exist without anyone in the two top roles.
Invesco's counsel, senior advocate Janak Dwarkadas, however, argued that calling for the EGM was not in violation of any law and that the shareholders had a right to call for the meeting.
"Before calling the meeting, how can you (ZEEL) come to the court and say look into the legality of this?" asked Dwarkadas.
The high court closed all arguments and reserved its order on the suit filed by ZEEL.
It is likely to pronounce its order on October 26.