ZEE Entertainment institutional investors seek removal of MD Punit Goenka; call for EGM today

Zee Entertainment Enterprises (ZEE) major institutional investors Invesco Developing Markets Fund and its subsidiary OFI Global China Fund LLC have called for the removal of Managing Director Punit Goenka and two Independent Directors. Zee Entertainment Enterprises said in a stock exchange filing that Invesco and OFI Global have called for an Extraordinary General Meeting (EGM) on Tuesday. Invesco and OGI Global together hold a 17.88% stake in ZEE. The two institutional investors have further recommended appointing six independent directors to the board of the company. Punit Goenka is the son of Essel Group Chairman Emeritus Subhash Chandra.

Apart from Punit Goenka, Invesco and OFI Global have also sought the removal of Manish Chokhani and Ashok Kurien as Directors of the company. Both Chokhani and Kurien resigned from the Board of ZEE on Monday. The six independent directors recommended by Invesco include Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, and Gaurav Mehta.

“While we await the actual outcome of the meet, with promoters group holding only ~4% stake, it is likely that this resolution will go through. This move is likely to remove promoter led overhang on the stock, owing to past instances of inefficient allocation of capital, related party transaction, etc,” ICICI Direct said in a note.

Invesco’s, formerly known as Invesco Oppenheimer Developing Markets Fund, move comes after advisory firm Institutional Investors Advisory Services (IiAS) highlighted corporate governance concerns in the company. Investors have reacted positively to the development. On BSE, Zee Entertainment Enterprises’ share price was up 22% trading at Rs 229.6 per share.