Reuters File Photo: A guard stands next to a G-Television banner outside a film studio in Mumbai, India, September 24, 2021. Reuters / Francis Mascarenhas
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Written by Abhirup Roy and Aditya Kalra
NEW DELHI (Reuters) – India’s G Entertainment is embroiled in a legal battle with Invesco, the TV network’s chief executive, citing concerns over corporate governance.
G says it has tightened its governance process. But one of India’s biggest news and entertainment TV groups comes at a controversial time when it recently began talks to merge with a local unit in Japan. Sony (NYSE 🙂 Group Corporation
Here is what the Invesco-G controversy is all about:
What is Invesco’s claim?
Invesco’s legal files reviewed by Reuters – which are not public – show that it seeks changes to G in light of corporate governance and financial irregularities that have plagued the company, and even given the flag by India’s market regulator.
Invesco owns about 18% stake in Developing Markets Fund and its OFI Global China Fund LLC G. They have suggested the appointment of six new independent board members and the removal of Puneet Goenka, the current CEO of G.
Invesco asked G to convene an “extraordinary general meeting” of shareholders on September 11 to consider the demands.
How to view Invesco’s claims?
On October 1, the G Board rejected Invesco’s request for reconstitution, saying the move had legal implications.
Invesco then took the fight to the Indian Company Tribunal, where it was trying to force G to call a meeting, saying G’s behavior was “oppressive”. G has two weeks to respond to the tribunal’s order on Friday.
The Indian TV giant says it has implemented corrective plans to address concerns raised by market regulators and it follows “the highest standards of governance”.
It is not yet clear which way shareholders will vote if a meeting is called, but GE founder Subhash Chandra, CEO Goenka’s father, has accused Invesco of conspiracy to take over.
“They want to take possession of the company against Indian law,” Chandra said. Invesco did not comment on the allegations.
Is the ZEE-SONY deal at risk?
While Invesco was pushing for a G shareholder meeting, the Indian giant announced its merger with Sony. The terms of the deal state that Goenka plans to continue as chief executive of the consolidated entity, which will be owned by a majority of Sony.
Invesco told the Indian tribunal hearing that it was not against the G-Sony plan, but criticized its filing of how the two entered into negotiations.
The Sony deal would allow Chandra’s family to increase their shareholding from 4% to 20% now, Invesco said, adding that it was “an attempt to confuse the general public” and to close the meeting of shareholders.
ZEE Prime-Time Appeal, Bollywood Support
In an unusual public diet, Chandra appeared on Prime’s Time TV on G’s Hindi news channel this week.
“I urge Invesco to behave like a shareholder, not like the owner … You want a war, then I will fight,” Chandra said when he spoke of G’s journey to India.
G, which has been offering dozens of entertainment channels and shows in many local languages of India for many years, is a household name. It is now finding support from Bollywood.
“G which was the first Indian channel to be aired by Indian nationalists … (now) violent by American and Chinese investors. Please pray G Entertainment is in the emotional hands of the original Indian entrepreneurs,” film producer Bonnie Kapoor said on Twitter (NYSE :).