ZEEL boardroom battle: Punit Goenka gets support from minority shareholders at AGM

Rakesh Jhunjhunwala, BofA Securities buy shares worth Rs 225 crore in ZEEL

e4m by exchange4media Staff
Updated: Sep 15, 2021 8:25 AM
Punit Goenka

Media conglomerate ZEEL's management team received support from a section of minority shareholders at the Annual General Meeting (AGM) on Tuesday. ZEEL MD and CEO Punit Goenka, whose family owns a 3.99% stake in the company, is battling an aggressive Invesco Developing Markets Fund, which seeks to remove him from the board.

Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) and its subsidiary OFI Global China Fund LLC, which collectively own 17.88% stake in the company, have sought an extraordinary general meeting (EGM) for removing Goenka.

Apart from him, the two shareholders have also sought removal of non-independent directors Manish Chokhani and Ashok Kurien. However, both Chokhani and Kurien have already resigned from the board.

At the AGM, a shareholder commented that Invesco and OFI Global should come to the AGM and explain their position as to why they want to remove Goenka.

“Invesco is having some problems. If they have any problems, they should take us into confidence. Also, they should come in the AGM and explain what is wrong with the company. I hope Invesco is listening. They should not just show the power by the shareholding. They should also come back to the shareholders and explain why we should vote for them. We will be open-minded, and we will decide on merits,” the shareholder added.

Another shareholder, during the virtual AGM, said that a dividend of Rs 2.50 per share is good. “We are going in the right direction. The company has rewarded its shareholders. I hope and pray that you will reward us in future,” the shareholder stated.

One minority shareholder said, “We remain with you, and you have our staunch support.”

Some shareholders criticised Invesco for refusing to take minority shareholders into confidence. “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.

Shareholder Tamal Majumder asked the management about the “real reason” behind the resignation of Ashok Kurien and Manish Chokhani. Chokhani and Kurien had cited changed circumstances and perspective post Covid-19 and pre-occupation as the reasons for resigning as independent directors.

A shareholder asked the company about the status of recovery of dues from related parties. “Given the developments over the last 24 hours regarding the EGM for the removal of the Board of Directors, I think it's just. It's also the fact that the stock market has welcomed such a move, and that's a reflection of the state of corporate governance,” he added.

Meanwhile, amid the ongoing boardroom tussle, ace investor Rakesh Jhunjhunwala has bought 50,00,000 (5 million) shares of Zee Entertainment Enterprises Limited (ZEEL) at Rs 220.44 each. Jhunjhunwala bought shares worth Rs 110.22 crore through Rare Enterprises.

Apart from Jhunjhunwala, BofA Securities Europe SA, which already held 1.03% stake in ZEEL, has bought 48,65,51 (4.86 million) shares at an average price of Rs 236.20 apiece. The total value of the deal is Rs 114.92 crore. Together, the two entities have bought shares worth Rs 225.14 crore.

On NSE, ZEEL shares rose 40.06% to close at Rs 261.7 on Tuesday.

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