In a brief filed late Monday evening, ZEEL said that Invesco and OFI Global China Fund, jointly holding a 17.88% stake in the company, had called for an extraordinary general meeting for Goenka’s ouster.
At present, Goenka – the son of the founder and chairman of Essel Group Subhash Chandra – is the CEO and Managing Director of ZEEL. In addition, the company also said that its two non-executive and non-independent directors – Manish Chokhani and Ashok Kurien – have resigned with immediate effect. The company said the directors resigned citing “changes in life circumstances” and “concerns”.
Last week, proxy advisory firm Institutional Investor Advisory Services India (IiAS) raised corporate governance concerns at ZEEL and asked shareholders to vote against the resolutions. IiAS had asked the shareholders not to support the resolutions to renew Chokhani and Kurien and to reject the adoption of the financial statements.
Both Kurien and Chokhani were members of the audit committee in FY20 and are responsible for losses from related party transactions and governance issues, IiAS alleged. The company had denied all the allegations.
At the company’s annual general meeting on Tuesday, Zee Enterprises chairman R Gopalan did not mention the resignations of the two directors. Invesco and OFI Global China Fund had also requested the nomination of six of its own candidates to the board of directors of Zee Entertainment.
The results of the votes of the various resolutions of the annual accounts will be published after two days.
“Corporate governance has been the biggest hurdle for Zee where the recent development of EGM for the dismissal of directors and its promoters changes feelings for the group. Zee has a great brand and network as well as strong operations where the only concern was management, ”said Santosh Meena, research manager at Swastika Investmart.
“The stock is trading at attractive valuations and it is one of the strongest and most preferred stocks for FIIs in the media space. If there is a change of promoter, we can see a strong re-scoring in the meter as we saw earlier in CG Power, ”he added.
Ahead of the AGM, the company’s shares had surged at the start of trading and closed 39.99% higher at 261.50 on BSE.