US investment firm Invesco said Thursday it would cease efforts to wake up Zee Entertainment’s top management, citing a planned merger between the Indian TV network and the local unit of Japan’s Sony Group.
Zee’s shares shot up 18% on the news.
Invesco, which owns nearly 18% of Zee, claimed to have corporate governance issues and had sought the ouster of Zee’s chief executive officer and the appointment of new independent board members. Zee has denied any allegation.
Although Invesco recently won an Indian court order to call a meeting of Zee shareholders, it said it had decided not to pursue the matter.
“Upon the completion of the merger, the board of directors of the newly combined company will be substantially reconstructed, which will achieve our goal of strengthening the board’s oversight of the company,” Invesco said in a statement.
Zee welcomed Invesco’s decision and said the Sony merger, announced last September, was in the “interest of all stakeholders”.
However, Invesco said it would continue to monitor the progress of the proposed merger and if it fails, it could seek another shareholders’ meeting in Zee.
Sony did not immediately respond to requests for comment from Reuters.