Zee Ent’s business to come to fore with likely exit of Goenka

Shareholders of a brand synonymous with television network in India were once concerned that a change in promoter-run management could negatively impact operations.

However, that sentiment has taken a sharp turn in less than two years. Two large institutional shareholders are now seeking the ouster of Zee Entertainment Enterprises Ltd's Managing Director and Chief Executive Officer Punit Goenka.

The sharp surge in the share price of the company reflects that investors are more than welcoming of the move.

"In the near term, the move could help improve the quality of the board...it will also help address investor concerns around corporate governance...It is a perception thing," said an analyst with a leading Mumbai-based brokerage.

Invesco Developing Markets Fund and OFI Global China Fund Llc, who jointly own 17.88% stake in Zee Entertainment, have asked the board to convene an extraordinary general meeting to oust Goenka as managing director.

They had also sought the resignation of Manish Chokhani and Ashok Kurien as independent directors, and the induction of six new independent directors.

On Monday, both the independent directors tendered their resignations. Concerns of promoters' inability to repay debt, corporate governance issues, and a COVIDhit demand environment has seen the shares fall nearly 50% in three years, causing investors to overlook that Zee Entertainment remains one of the best-run businesses in its industry.

Meanwhile, addressing the 39th AGM of the company, Punit Goenka said ZEEL is embarking on a new path under 'ZEE 4.0', through which it aims to enhance profitability and continue to grow ahead of the industry.

The company has a new organisation design and a clear-cut growth strategy, Goenka said .

"With ZEE 4.0, we are predicting the future by creating it ourselves. Because the future belongs to those who believe in their dreams and dare to take risks," he said.