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Aditya Kalra, Abhirup Roy

NEW DELHI, (Reuters) –Indian TV channel Zee Entertainment has been locked in a dispute with Invesco after Invesco demanded the ouster of Zee Entertainment’s CEO, citing corporate governance concerns.

Zee stated that it had tightened its governance procedures. The dispute is a sensitive one for Zee, India’s largest news and entertainment television networks. It recently began merger negotiations with the Japanese local unit. Sony Group Corp.

This is the Invesco-Zee controversy.

What are INVESCO’S DEMANDS?

Reuters reviewed Invesco’s legal documents, which aren’t public. They show that it is seeking changes at Zee to address financial and corporate governance issues that have plagued the business. These irregularities have been flagged even by India’s regulator.

Nearly 18% of Zee is owned by Invesco’s Developing Markets Fund LLC and OFI Global China Fund LLC. Punit Goenka (current CEO) has been removed and six independent directors have been proposed by Invesco.

Invesco asked Zee, Sept. 11, to hold an “extraordinary meeting of shareholders” to discuss its demands.

HOW DOES ZEE VIEW INVESCO’S DEMANDS?

Zee rejected Invesco’s Oct. 1 request to restructure the board and stated that it had legal infirmities.

Invesco then brought the case to India’s company tribunal. There it attempted to make Zee call the meeting and said that Zee is being “oppressive” by claiming Zee is a submissive person. A tribunal order from Friday gave Zee two weeks to reply.

Indian TV company, the Indian Broadcasting Corporation claims it implemented corrective steps to address market regulator’s concerns and follows “highest standards” of governance.

Although it is not clear which direction the shareholders will vote, if there is a meeting, Zee’s founder Subhash Chandra has charged Invesco with plotting to takeover CEO Goenka.

Chandra said that they want to acquire the company in violation of Indian laws. Invesco didn’t comment on the allegation.

IS ZEESONY DEAL AT RISK

Invesco was pressuring for Zee shareholder meetings. However, Indian giant Zee announced merger talks with Sony. In the terms of the agreement, Goenka is expected to remain as CEO of the newly merged entity. Sony will own a majority.

Invesco, in Indian tribunal hearings, said that although it was not against ZeeSony plans but filed a criticism of the manner they entered into discussions.

Invesco claimed that Chandra’s family would be able to increase their shareholding from 4% to 20% with the Sony deal.

ZEE PRIME TIME APPEAL, BOLLYWOOD SUPPORT

Chandra appeared on Zee’s Hindi news channel, making an unorthodox public diatribe.

Chandra was teary eyed as he spoke of Zee’s Indian journey.

Zee is an Indian household name that has offered entertainment channels in many languages and programs in India for decades. Now, Bollywood is supporting Zee.

American and Chinese investors are now hunting Zee, the first Indian channel that was promoted by Indian nationalists. Pray Zee Entertainment will remain in Indian entrepreneurs’ passionate hands,” Boney Kapoor (NYSE:) stated on Twitter.