Mumbai: The Bombay high court on Friday reserved its order in a civil suit filed by Zee Entertainment Enterprises Ltd (Zeel) seeking to declare the requisition notice sent by the company’s largest shareholder Invesco.

The court has adjourned the matter to 26 October for the pronouncement of the order, according to a report by ET.

Zeel argued before the bench that requisition notice was illegal because the shareholders have not taken prior approval from the ministry of information and broadcasting. They also said that the notice was in violation of various rules and guidelines of the Securities and Exchange Board of India (SEBI), the ministry of information and broadcasting (MIB), and the Competition Commission of India (CCI).

“Shareholders are saying listing obligations and disclosure requirements regulations are merely guidelines, which is totally incorrect,” argued counsel, on behalf of Zeel. They also stated that a listed company cannot have a board meeting without MD and CEO.

"Zeel’s board is acting in accordance with the spirit of the Companies Act that is a fiduciary duty towards its shareholders and their best interest," said the advocate.

Invesco’s side stated that they have a statutory right to call for an extraordinary general meeting (EGM) and have moved to the National Company Law Tribunal (NCLT). “The tribunal has the power to decide on this case,” it noted, “this is not a stage at which the high court should be troubled.”

The Zeel-Invesco tussle began when the media company’s two top investors Invesco Developing Markets Fund and OFI Global China Fund LLC who combined own 18 per cent stake in the company had sent a requisition notice to the company on 11 September to call an EGM even after two weeks, the investors moved to NCLT, citing provisions of company law, according to which the company is bound to call for an EGM within a specific number of days if stakeholder demanding it owns more than 10 per cent of the company.

The investors had also sought the removal of long-standing directors and close associates of the Chandra family from the board. The two independent directors Ashok Kurien and Manish Chokhani have already submitted their resignations. 

The investors moved to have six nominees appointed to the board of Zeel, which included Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepali, and Gaurav Mehta as independent directors of the board for a term up to five consecutive years. The notice was received by Zeel on 12 September, and it informed the stock exchanges on 13 September, adding that the appointments are subject to approval by the MIB.

Zeel refused to conduct the EGM citing ‘shareholders interest’ and moved to Bombay high court on 2 October seeking to declare the requisition notice as "illegal and invalid." Meanwhile, Invesco filed a petition with the NCLT to demand their right to call for an EGM.