Zee is currently in the middle of a boardroom tussle between the existing management and the largest shareholders — Invesco Developing Markets and OFI China Fund.
Invesco and OFI China, which together hold a 17.88 per cent stake in the company, have called for an extraordinary general meeting of the shareholders to pass resolutions including the removal of the incumbent CEO and appointment of new independent directors.
Invesco’s move comes on the back of institutional proxy advisory services IIAS calling for investors to reject resolution for reappointment of certain directors to Zee Entertainment’s board at the AGM.
“We remain with you and you have our staunch support,” a shareholder told the company’s board in the virtually held AGM.
Some old time shareholders of the company said that they have full faith in the current management under Punit Goenka and welcomed the appointment of new independent directors like Piyush Pandey.
“We will never stand with Invesco. Invesco will have to take us in confidence and then we will think about it (EGM resolutions),” said another shareholder.
However, one shareholder of the company pointedly remarked that the stock market’s reaction to the development of the past 24 hours at the company was “telling”.
Shares of Zee Entertainment ended 40 per cent higher today in their best one-day move in history as the market welcomed the news of boardroom revamp that could help the company move on from the shadow of the past corporate governance mishaps.
“In our view, with promoters holding just 3.99% in Zee and the stock languishing, it was only a matter of time before the board was revamped,” said Abneesh Roy of Edelweiss Securities.
Investors present at the virtual AGM, however, grilled the company’s board over certain corporate governance issues linked to related party transactions and bank guarantees given for other entities.
