Two investors of ZEEL seek Punit Goenka’s ouster; Chokhani & Kurien resign

Invesco Developing Markets Fund and OFI Global China Fund, which together hold 17.88% of the paid-up share capital of Zee Entertainment Enterprises Ltd (ZEEL) that carries the right of voting, have sought the removal of ZEEL CEO Punit Goenka as Director, along with two other Directors of the company – Manish Chokhani and Ashok Kurien.

Both Chokhani and Kurien resigned as Non-Executive Non-Independent Directors of the company on September 13, 2021. Consequent to their resignations, ZEEL informed the bourses that Kurien has ceased to be a Member of Corporate Social Responsibility Committee and Stakeholders Relationship Committee of the Board with immediate effect; and Chokhani has ceased to be a Member of Nomination and Remuneration Committee and Risk Management Committee of the Board with immediate effect.

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The investors have also proposed the appointment of six new independent directors:

Surendra Singh Sirohi, Independent Director, HFCL

Naina Krishna Murthy, Founder and Managing Partner of K Law

Rohan Dhamija, Senior Partner, Analysys Mason

Aruna Sharma, Independent Director, Welspun Enterprises and Jindal Steel

Srinivasa Rao Addepalli, Director, Tata Communications Payment Solutions

Gaurav Mehta, India Head, The Raine Group

Invesco and OFI Global have also called for an Extraordinary General Meeting of shareholders of ZEEL to vote on the resolutions regarding the removal of three Directors and appointment of six Independent Directors.

While the investors have not given the reasons for the restructuring that they have sought in ZEE’s Board, according to industry sources, the investors and ZEE’s founders have been at loggerheads over the company’s performance and lapses in governance matters.

In response to the investors’ letter, ZEEL stated that it is “examining the letter and its related attachments, and will take necessary action as per applicable law”.

Giving his analysis of this development, Karan Taurani, Senior Vice-President, Elara Capital, commented, “We believe the above move will be a mild positive from a medium to long term perspective ; however ,near term challenges persist in the form of transition for the new management to take over.”

The company has always been doing well in terms of business performance under the current CEO leadership, however outperformance versus industry average has converged sharply over the last 3 years due to: 1) loss of share in the regional genre on the back of competitive intensity, and 2) poor performance in the Hindi GeC space.

Taurani believed that appointment of a new CEO will pave way for a new strategy, especially on digital, which will help it compete with global OTT giants and other Indian OTT players.”

He further said, “We continue to maintain that transition towards digital is a challenge for broadcasters due to:

1) higher content costs

2) below par user experience vs global peers

3) issue of distribution (shift from B2B to B2C)

However, if the franchise is large, does reasonably well on digital and has a good recall in terms of brand, there will always be a scope of company like ZEE trading at 16-17x one year forward despite factoring in concerns on digital; outperformance on digital front can lead to multiple re-rating from above range.”


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