Vote against Zee directors: IIAS to shareholders

Proxy advisory firm Institutional Investor Advisory Services (IIAS) has raised fresh corporate governance concerns at Zee Entertainment Enterprises by asking shareholders not to vote for re-appointing independent directors Ashok Kurien and Manish Chokhani on the company’s board.

Asking shareholders to vote against the proposal to reappoint Ashok Kurien on Zee Entertainment board, IIAS said Kurien was the founder of the Zee group and while the company has reclassified him as a non-promoter, no requisite regulatory filings or shareholder approval was sought for the same, and hence it classifies him as a promoter.

“Kurien was a member of the audit committee in FY20 and is accountable for the losses on account of related party transactions as well as governance concerns outlined by previous independent directors, which resulted in significant erosion in shareholder wealth,” the IIAS said, adding that the promoter equity declined to 3.99 per cent as on June 30, 2021.

“We believe that the board must bring in the right mix of professionals who have an understanding of the media and the digital business. Further, having the erstwhile promoters on the board may impede the directors’ ability to take hard decisions,” it said.

A Zee spokesperson said it had strongly rebutted the views of the proxy advisor on the reappointment of directors. “The reasons for the rebuttal are mentioned in the report of the proxy advisor. The company reiterates that the Nomination and Remuneration Committee (NRC) has finalised the overall remuneration framework, after a structured evaluation process and has implemented the same with the board’s approval. In the last few years, the audit committee introduced various policies and measures to further strengthen the company’s governance standards with sharper focus on transparency. The said directors have played an active role in institutionalising the governance standards based on their rich expertise and experience. Accordingly, the NRC and the board (comprising majority of independent directors) have unanimously recommended re-appointment of the directors to the shareholders. Other credible proxy advisors, including certain reputed international firms, have recommended voting in support of the appointments,” the spokesperson said.

Early this week, Dish TV said YES Bank had sent a communication to the company seeking the removal of the present managing director, Jawahar Goel, and other independent directors over lapses in corporate governance.

IIAS said as a member of the NRC of ZEEL, Kurien was also accountable for the manner in which remuneration had been managed in FY21 as MD Punit Goenka’s pay increased by 46 per cent (higher than what was approved by shareholders in the 2020 AGM), while employees were given no raise for FY21.