Zee Entertainment's Share Price Soars 8% After Rejecting Reappointment of Punit Goenka as Director
Mumbai (Alayaran.com): Shares of Zee Entertainment Enterprise rose sharply to Rs 132.60 on BSE, up nearly 8%, after shareholders overwhelmingly rejected Punit Goenka's reappointment as director during the company's annual general meeting (AGM) on Thursday.
According to voting results, 50.45% of shareholders opposed the resolution, indicating a clear dissatisfaction with Goenka's leadership over his role in failing to consummate the merger deal with Sony Pictures Networks India. The board had initially planned to reappoint Goenka as director and managing director, but shareholders have expressed their discontent.
After being informed of his resignation as managing director and withdrawal of consent for reappointment, Goenka remains as CEO, a position he will hold for a five-year term until 2029.
In another significant move, the Zee board approved the appointment of Saurav Adhikari as additional director in the capacity of non-executive director, effective November 29. This appointment was recommended by the Nomination & Remuneration Committee and is subject to member approval.
During the AGM, Goenka shared his vision for ZEEL's future, focusing on improving short-term performance while ensuring long-term sustainability. He emphasized the company's dual objectives of generating attractive returns for shareholders and sustaining profitability with healthy margins. Goenka attributed ZEEL's operational strategy to three pillars: frugality, optimisation, and quality content.
However, Goenka acknowledged challenges such as a subdued advertising environment, declining ad spend in sectors like FMCG, gaming, and direct-to-consumer brands. He noted that the introduction of New Tariff Order 3.0 had mitigated some revenue pressures, but warned that ZEEL's growth depends on its ability to adapt to a dynamic competitive landscape.
The shares of Zee Entertainment have been facing challenges since the collapse of the merger deal with Sony Pictures Networks India. The company has been streamlining operations and controlling costs in an effort to overcome financial struggles.
Industry experts say that shareholder discontent is a clear indication that Goenka's leadership is no longer acceptable, especially given his role in failing to consummate the merger deal. "The board should introspect about the company's future and its leadership," said Shriram Subramanian, founder and managing director of InGovern Research Services.