India's Zee Entertainment surges after top investors call to remove directors

Zee Learn

14/09/2021 11:26

BENGALURU, Sept 14 (Reuters) - Shares of India's Zee
Entertainment Enterprises Ltd  ZEE.NS  soared 40% on Tuesday in
a record daily gain after top shareholders called for a
management reshuffle, including the exit of its chief executive
officer from the board.
    Shareholders Invesco Developing Markets Fund and OFI Global
China Fund, which together hold a 17.88% stake in Zee, in a
letter asked for the removal of CEO Punit Goenka and two others
as directors, Zee said late on Monday https://www.bseindia.com/xml-data/corpfiling/AttachLive/877be9b5-8812-4be6-9239-e7193c7c75f2.pdf.
    The investors also asked for the appointment of multiple
independent directors to the media and entertainment company.
    Zee, which has a presence in television broadcasting and
digital media with brands such as Zee TV, said it was examining
the letter. Reuters could not immediately reach the investor
funds for comment.
    Separately, Zee said on Monday https://www.bseindia.com/xml-data/corpfiling/AttachLive/52a91184-ea90-4412-bf35-9e2998867d22.pdf
 that directors Manish Chokhani and Ashok Kurien, who the
investors wanted to remove, had resigned.
    The development comes days after proxy advisory firm
Institutional Investor Advisory Services (IIAS) raised fresh
corporate governance concerns at Zee Entertainment and asked
shareholders to vote against reappointing Chokhani and Kurien as
directors.
    Among other concerns, IIAS alleged Kurien and Chokhani were
accountable for a 46% increase in Goenka's remuneration for
fiscal year 2021, higher than what shareholders approved in the
2020 AGM.
    Zee did not immediately respond to a request for comment.
    "This can be a positive move for the company as appointing
new directors might improve its corporate governance and
oversight of the business," Likhita Chepa, senior research
analyst at CapitalVia Global Research, said.
    Zee is set to hold its annual shareholder meeting later in
the day.
    Shares of other group companies such as Zee Media  ZEEN.NS ,
Zee Learn  ZEEE.NS  and Dish TV India  DSTV.NS  jumped between
5% and 19%, following the funds' call to remove the Zee
Entertainment directors.
    Zee Entertainment shares recovered its losses for the year
following Tuesday's gains.

 (Reporting by Rama Venkat in Bengaluru; Editing by Shounak
Dasgupta)
 ((ramavenkat.raman@thomsonreuters.com; https://twitter.com/ramavenkat0607))