Goenka questions Invesco’s silence over Reliance offer

Says will continue to take steps to safeguard company

DURING MY BRIEFING TO THE BOARD, I EMPHASISED THE POINTS PERTAINING TO THE PROPOSAL FROM INVESCO .... THE ONLY REASON I DID NOT AGREE TO THE PROPOSAL WAS BECAUSE THE SHAREHOLDER VALUE WAS GETTING COMPROMISED”

PUNIT GOENKA, Managing Director and Chief Executive, ZEEL

Zee Entertainment Enterprises on Thursday questioned the silence of its largest investor, Invesco, over the merger deal pitched by the fund in February and its lack of corporate governance while seeking to change the board of the company.

In a letter, Zee Managing Director and Chief Executive Punit Goenka asked why Invesco was silent when it made the extraordinary general meeting requisition about its role as an investment banker. “Does good corporate governance only apply to companies and not their institutional investors? As a law-abiding citizen and a representative of a responsible corporate citizen, I have and repose complete faith in the Indian judicial and regulatory system and, hence, I am most certain that these questions will be answered for all of us,” he said.

Goenka said he would ensure that no one maligns the intrinsic value of this company for their own benefit, and he would continue to pursue this in the best interests of all the shareholders, and at immense personal costs.

“In this situation, it is not about one versus the other. The shareholders and management of a company are two sides of the same coin. It is all about increasing the value of that coin together, for the betterment of all the shareholders and the company at large. Under the guidance of the board and in line with the advice sought from our legal counsel, I will continue to take the required steps to safeguard ZEE and its future,” he said.

Invesco, which is an 18 per cent shareholder in ZEE, and the Zee board are engaged in a takeover battle with Invesco seeking to remove Goenka and appoint six of its directors. After Zee revealed that Invesco was pushing a merger deal with a strategic investor, which would have led to a loss of ~10,000 crore for all Zee shareholders, Invesco said it was just a facilitator for a merger between Reliance-owned entities.

“During my briefing to the board, I emphasised the points pertaining to the proposal from Invesco. My attention was on the imbalance observed in the valuation and how it was not in the best interest of our shareholders. The only reason I did not agree to the proposal was because the shareholder value was getting compromised. I will withstand any amount of pressure to preserve ZEE’S intrinsic value and ensure that nothing impacts the returns being delivered to all the shareholders,” Goenka said.

The Goenkas own a 4 per cent stake in the company.