Zee Entertainment Enterprises Limited (ZEEL) shares rose 15% and touched the upper circuit at Rs 294.45 on the BSE in Thursday’s intraday session, after the company’s largest shareholder Invesco Developing Markets Fund on March 23 said it had decided not to pursue an extraordinary general meeting (EGM) to add six independent directors as Zee’s merger with Sony will achieve the firm’s aim of strengthening board oversight.

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“Since we announced our intention to requisition, Zee has entered into a merger agreement with Sony. We continue to believe this deal in its current form has great potential for Zee shareholders. We also recognise that, following the merger, the board of the newly combined company will be substantially reconstituted, which will achieve our objective of strengthening board oversight of the company,” the fund said.

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Invesco will continue to monitor the proposed merger’s progress. “If the merger is not completed as currently proposed, Invesco retains the right to requisition a fresh EGM,” it added.

On March 22, the Bombay High Court quashed a single-judge ruling giving an interim injunction on convening the EGM to oust Zee CEO Punit Goenka.

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 “We have held that the requisition notice (for EGM sent by Invesco to Zee) is neither illegal nor incapable of being set aside,” the court said. Senior counsel for Zee sought a status quo which the court allowed for three weeks.

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In September 2021, Invesco sought an EGM from the Zee board because it felt the company was not working efficiently. The fund, which owns about 18% of Zee, attempted to oust three directors from the board, including Goenka.

Following Zee’s unwillingness to reply to the requisition, Invesco approached the company law tribunal, which ruled that the requisition be considered.

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Zee challenged the tribunal and asked the high court to declare the requisition notice illegal and void.

In an interim ruling issued in October 2021, a single bench granted an injunction against convening the EGM, which Invesco challenged, claiming that the high court lacked authority to hear the dispute, which should have been handled by the tribunal.

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Zee Entertainment recorded a consolidated net profit of Rs 298.7 crore for the December quarter, a 25.30% drop from the previous year’s profit of Rs 399.91 crore. The operational revenue was Rs 2,112.64 crore, a 22.59% decrease from Rs 2,729.36 crore in the same period the previous year. The company’s Ebitda for the quarter was Rs 4,793 crore, a 24.8% fall. Ebitda margins were 22.7%, down from 29.3% in the year-ago quarter.