Investors want MD Punit Goenka out of Zee Entertainment Enterprises
NEW DELHI: Indian promoters are increasingly confronted with shareholder activism, backed by institutional investors and proxy advisory firms. The latest to face the heat is Zee Entertainment Enterprises (ZEEL) with its largest shareholders calling for ouster of MD Punit Goenka, son of the Essel Group chairman Subhash Chandra, and appointing six new independent directors.
Invesco Developing Markets Fund and OFI Global China Fund, which together hold 17.88% stake in ZEEL, have called an extra-ordinary general meeting for the removal of Goenka and independent directors Ashok Kurien and Manish Chokhani.
Analysts, however, are not amused as they say the exit of the Goenka family, which currently owns just 3.99% in ZEEL, is a matter of time. “There is a good professional team in key departments below the MD level. The question is, will they stay if Goenka leaves?” said Abneesh Roy, executive director (research), Edelweiss Securities.
Meanwhile, at the AGM on Tuesday, Goenka did not disclose anything on issues related to the call for management change. Rather, he chose to defend the corporate governance track record of the company. The verdict on key resolutions that were up for voting at the AGM, including adoption of financial results, will be out on September 16. All eyes are now on the crucial EGM, which will officially decide the fate of Goenka.
2 directors step down
Ahead of the AGM on Tuesday, independent directors Ashok Kurien and Manish Chokhani resigned from the board, ZEEL said