Punit Goenka, who has been an integral part of Zee Entertainment Enterprises Limited (ZEEL) as a CEO and part of the promoter family, faced a significant development when he resigned from his position as Managing Director and CEO in November. The move stirred controversy as two proxy advisory firms advised shareholders to vote against Goenka's reappointment as Director at ZEEL's annual general meeting on November 28.
Shareholders ultimately voted against Punit Goenka's reappointment as director, with a narrow margin of 49.54% in favor and 50.46% against the resolution. Institutional Investor Advisory Services (IiAS) expressed concerns over Goenka's attendance record at board meetings and highlighted SEBI's interim order regarding fund diversion, round-tripping, and governance lapses, which could pose legal and reputational risks for the company.
The failed $10 billion merger with Sony under Goenka's leadership, along with a significant drop in profits during his tenure as Managing Director, have raised doubts among shareholders. Notable institutional shareholders like LIC, Government Pension Fund Global, HDFC Mutual Fund, and others collectively hold a significant stake in ZEEL. Shriram Subramanian from InGovern Research Services suggested that shareholders seeking a leadership change have indicated their dissatisfaction by voting against Goenka's reappointment, with ZEEL's stock price experiencing volatility and downward trends due to governance issues and market concerns.
The future of Zee Entertainment Enterprises Limited remains uncertain as Punit Goenka continues in his role as CEO despite facing resistance from shareholders. Ashish Kumar Singh from Capstone Legal pointed out that the slim margin by which Goenka was ousted indicates the lack of support from the promoter family and sheds light on the significance of other shareholders in determining the company's future direction.