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Invesco attacks Zee over Sony deal, seeks shareholders’ support

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Invesco criticizes Zee over some aspects of its merger with Sony

US investment firm Invesco on Monday publicly lambasted television giant Zee and objected to some of the terms of its proposed merger with Japan’s Sony Group, drawing support from the media company’s shareholders in a bid to reform its management. said to.

Invesco Funds holds about 18 per cent of Zee, and the first such public attack on one of India’s largest television groups adds to the pressure, just days after its founder was accused of plotting a hostile takeover.

The controversy centered around Invesco’s call to reform Zee’s board and remove its CEO Punit Goenka in the light of corporate governance lapses and financial irregularities, which was also flagged off by India’s markets regulator this year. Zee has rejected Invesco’s request and said it has tightened its procedures.

In an open letter and press statement, Invesco said the terms of the Zee-Sony merger announced last month give Zee’s founding family the option to increase their stake from 4 per cent to 20 per cent, which remains in place. completely opaque”.

Zee did not respond to a request for comment. Sony did not immediately respond to requests for comment outside of its regular business hours.

Invesco said, “The lack of clarity about key aspects of the Zee-Sony announcement should concern all shareholders. We currently consider this to be nothing more than a distraction from the primary issues and camouflage on the part of Zee.”

It added that we would strongly oppose any strategic deal structure that unfairly rewards select shareholders, such as the promoter family, at the expense of common shareholders.

In addition to the expected removal of Zee’s current CEO Goenka, Invesco has suggested that six new independent board members should be appointed to Zee. It has asked an Indian tribunal to compel Zee to convene a meeting to consider its demands, and Zee has two weeks to respond.

In its letter on Monday, Invesco called for support from Zee shareholders, saying there was an urgent need to strengthen independence across Zee’s board.

In his TV appearance last week, Zee founder Subhash Chandra, who is CEO Mr. Goenka’s father, told Invesco to “behave like a shareholder not like an owner”, saying “You want a fight, then I I’ll fight back.”

Invesco said in its statement that Zee had resorted to “a reckless and desperate public relations effort”.

In recent weeks, Zee, a household name in India’s television and film landscape, has received backing from Bollywood stars, who have taken to social media to say they hope the crisis for the group ends soon.

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