In a late evening filing on Monday, ZEEL said Invesco and OFI Global China Fund, together holding a 17.88% stake in the company, have sought an extraordinary general meeting for Goenka’s ouster.
At present, Goenka – the son of Essel Group founder and chairman Subhash Chandra – is the CEO and managing director at ZEEL. Further, the company also said its two non-executive, non-independent directors — Manish Chokhani and Ashok Kurien — have resigned with immediate effect. The company said the directors resigned citing “changed life circumstances” and “pre-occupation”.
Last week, proxy advisory firm Institutional Investor Advisory Services India (IiAS) had raised corporate governance issues at ZEEL and asked shareholders to vote against resolutions. IiAS had asked shareholders not to support resolutions to reappoint Chokhani and Kurien and reject adoption of financial statements.
Both Kurien and Chokhani were members of the audit committee in FY20 and are accountable for the losses of related party transactions and governance concerns, IiAS had alleged. The company had denied all allegations.
At the company’s AGM on Tuesday, Zee Enterprises chairman R Gopalan did not mention the two directors’ resignations. Invesco and OFI Global China Fund had also sought appointment of six of its own nominees on the board of Zee Entertainment.
The voting results of various resolutions of the annual accounts will be out after two days.
“Corporate governance was the biggest roadblock for Zee where the recent development of EGM for removal of directors and its promoters is changing sentiments for the group. Zee has a big brand and network along with strong operations where the only concern was management,” Santosh Meena, head of research at Swastika Investmart, said.
“The stock is trading at attractive valuations and it is one of the strongest and FIIs favourite stocks in the media space. If there will be any change in promoter then we may see a big re-rating in the counter as we have seen earlier in CG Power,” he added.
Prior to the AGM, the company’s shares had surged in early trade and closed up 39.99% at `261.50 on the BSE.