In a rebuttal to Invesco’s October 11 open letter to ZEE shareholders, ZEE said some of the comments in the open letter were “unwarranted and incorrect.”
ZEE said the problems Invesco might have had with the Sony deal were unfounded as it would not result in dilution for any of the company’s shareholders.
Invesco had raised concerns about the additional 2% shares of Sony promoters to the Goenka family as part of a non-compete tax. ZEE said that since SPN would become the majority shareholder, they agreed to transfer a shared 2.11% of their fundraiser to the former ZEE promoters so as not to engage in competing activities with the merged company. “We would like to stress here that this will be a secondary transfer from the promoters of Sony (not a main show) and, therefore, will not be dilutive for any of the shareholders of the company as it is about ‘a private agreement between two shareholders. ”, informed ZEE the stock exchanges.
The company also said it disclosed this arrangement to all shareholders to be fully transparent and would seek their approval at the appropriate stage, as required by applicable applicable laws.
Further, he pointed out that the very deal that Invesco presented, the promoter group was offered a 3.99% stake in the merged entity, i.e. no dilution in the existing stake of the promoter group of the company, and Goenka was also offered ESOPs – with no vesting conditions – representing approx. 4% of the merged entity.
“As such, we believe that Invesco’s position in its open letter that it will strongly oppose any strategic deal structure that” unfairly rewards “selected shareholders, such as the promoter’s family, at the expense of common shareholders, goes against the deal that Invesco itself proposed only a few months ago, ”ZEE said.
The company also said that Invesco’s lack of transparency is also corroborated by the fact that, until ZEE unveiled the deal proposed by Invesco, the major shareholder did not disclose the fact that it was negotiating a agreement on behalf of the company without any authority, even criticizing the Sony agreement through the open letter.
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ZEE further stated that Invesco and all other shareholders are well aware of all matters dealt with under the SEBI board and that Invesco has worked alongside the company, taking and recommending corrective actions from the start. .
The company further pointed out that despite being fully aware of all issues, Invesco chose to vote in favor of the re-appointment of Goenka as chief executive and CEO, no later than September 2020 and had also insisted that he be the managing director and CEO of the merged entity, as part of the transaction proposed by Invesco a few months ago.
“All of these facts and Invesco’s silence regarding these matters in its notice of application give us reason to believe that Invesco’s recent actions are inconsistent with its past behavior, and were undertaken as an afterthought after various investors and analysts have sought to understand the logic behind Invesco’s actions in recent weeks, ”ZEE said.