Media baron Subhash Chandra stepped down as chairman of Zee Entertainment Enterprises Ltd. a week after debt-ridden promoters’ holding in the broadcaster fell to 5 percent after selling additional stake.
The company’s board accepted Chandra’s resignation as chairman with immediate effect, according to an exchange filing. He, however, stays as a non-executive director.
Chandra-led Essel Group, the promoter of Zee Entertainment, sold 16.5 percent shareholding in the media major to financial investors in a second effort to raise funds to pay off debt. This marks the end of Chandra’s role as the head of the media conglomerate he founded in 1992. The Essel Group played a pioneering role in India’s private satellite television.
The firm also appointed three new independent directors—R Gopalan, Surendra Singh and Aparajita Jain—replacing two independent directors and one nominee director of Essel Group, according to a separate exchange filing.
While Chandra stepped aside from the Chair, he also expressed the desire to step aside as a board member. However, the entire board requested him to not only continue as a board member but also to be the ‘mentor’ to the executive management and its managing director and chief executive officer.Zee Entertainment Enterprises’ exchange filing
The reconstitution of the board was to provide a strong signal to the existing and new institutional investors who have recently reposed their faith by investing Rs 4,770 crore, the filing said.
The divestments of promoter stake in its flagship company, as well as pending sale of some infrastructure assets, were prompted by large debt taken by Essel Group entities—a 2018 BloombergQuint investigation had estimated it at Rs 17,000 crore. The group had pledged shares of its listed companies in order to raise this debt.
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