Zee AGM: Punit Goenka Stands Firm In Face Of Shareholder Revolt

Punit Goenka fielded shareholder queries at Zee Entertainment Enterprises Ltd.'s annual general meeting on Tuesday amid demands for his ouster by institutional investors and a day after two of the company's directors stepped down citing personal reasons.

The questions pertained mainly to the company's operational performance and future strategy. The broadcaster’s managing director and chief executive officer, however, didn’t elaborate on the directors' resignation, referring to the reasons stated in the company's exchange filing as “self-explanatory”.

On Monday, two institutional investors—Invesco Developing Markets Fund and OFI Global China Fund LLC—demanded an extraordinary general meeting to vote on Goenka’s removal as director. The investors, which together hold 17.9% stake, also sought the ouster of independent directors Manish Chokhani and Ashok Kurien, both of whom resigned from the board on Monday, and appointment of six new independent directors.

Goenka didn’t respond when an investor said the stock market has welcomed the call for the EGM, saying it reflects the state of the company’s corporate governance. Shares of Essel Group firms surged on Tuesday, with the Zee Enterprises stock rising nearly 40%, a day after Chokhani and Kurien announced their resignations, with analysts cheering the investor activism.

Highlights of Goenka’s responses to investors:

• Linear business is Zee’s best-performing business.

• We’re still in investment mode in digital and film business.

• Digital business holds great promise for the future, will invest in it.

• We want to be a leading film studio.

• Learnings from Covid, importance of technology and business continuity planning has become more critical.

• The biggest impact of Covid-19 was seen on Zee Studios as cinemas were shut.

• No frauds were detected during the year.

• Zee 5 is present in 190 countries.

• We have strong emphasis on corporate governance.

• Zee TV and Zee Anmol lost market share and have plans in place to retrieve them.

• Board is closely monitoring recovery of receivables from Siti Cables.