Investment management firm ‘Invesco’ said today it facilitated talks between Reliance Industries and Zee Entertainment earlier this year over a possible tie-up, revealing for the first time that Mukesh Ambani was interested in the giant. from television.
But the U.S. investment firm rejected Zee’s claims that it would resort to double standards by opposing a possible merger with the Sony group’s Indian unit on terms similar to those discussed with Reliance. Invesco’s response is the latest in a growing public row where the US investor, who owns 18% of Zee, calls for a reshuffle of Zee’s board and the removal of CEO Punit Goenka for alleged breaches of corporate governance.
Zee said Tuesday that Invesco’s opposition to the proposed deal with Sony “runs counter to the very deal Invesco was proposing” with Reliance and that the U.S. company’s demands were not motivated by concerns about corporate governance or the activities of the company.
Zee accused Invesco of plotting a hostile takeover of the company, rejected requests for a shareholders meeting to vote on the U.S. investor’s demands and said it had tightened its processes.
The two sides are now locked in a bitter legal and public battle where they clash almost on a daily basis. Invesco has asked an Indian court to order Zee to call the meeting, and Zee has two weeks to respond.
While Zee’s comments on Tuesday did not name which entity Invesco had attempted to strike a deal with, the U.S. firm’s statement first revealed that it was Reliance, the giant conglomerate headed by Mukesh. Ambani.
“Invesco’s role, as Zee’s largest shareholder, was to help facilitate this potential transaction and nothing more,” said Invesco.
“… the implication that we, as a shareholder, would seek a transaction for Zee that is dilutive to the long-term interests of common shareholders, including ourselves, simply defies logic.”
Reliance and Zee did not immediately respond to requests for comment.
Reliance has a large media presence in India through its Network18 business which includes VH1, Nickelodeon, MTV and a range of other local language channels as well as Firstpost and Moneycontrol news portals and CNN-News18 news channels and CNBC TV18.
But Zee’s statement on Tuesday said she had rejected Reliance’s deal offer due to valuation issues and that “it would result in a loss to the company’s stakeholders.”
Invesco alleged that the financial irregularities which plagued Zee and were reported by the Indian market regulator, were linked to the family of CEO Punit Goenka
In an open letter to Zee shareholders this week, Invesco objected to the original terms of the deal with Sony which they said gave the Zee founding family the option of increasing its stake to 20%, instead by 4%, via methods that remain “totally opaque. “.
In recent weeks, Zee, who is a household name in the Indian television and film landscape, has found support from Bollywood stars, who have said on social media that they hope the crisis will end soon for the group.