Punit Goenka Had Welcomed Invesco in 2019, Which Now Wants To Oust Him from ZEE
Moneylife Digital Team 15 September 2021
In a curious turn of events, Inveso Developing Market Funds, which was welcomed by Zee Entertainment managing director (MD), Punit Goenka (elder son of Zee group founder Subhash Chandra), as a major investor in 2019, has now turned on him.
At Zee Entertainment, two largest shareholders of Zee sought removal of the company's MD Punit Goenka as well as two independent directors Ashok Kurien and Manish Chokhani. The two institutional investors—Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) and OFI Global China Fund LLC, together own a 17.88% stake in the company. They have given notice for an extraordinary general meeting (EGM) for this. The notice also included bringing in new independent directors. The two directors though decided not to wait and resigned from the board before the annual general meeting  (AGM) that was held yesterday.
In a telling tweet of how times change, a Twitter handle @leading_nowhere has pointed out how warmly Punit Goenka had welcomed Inveso Oppenheimer Developing Market Funds when it completed its first tranche of investment in Zee Entertainment when the promoters sold 11% stake of the media company to the US-based fund manager for Rs4,224 crore in September 2019. At that time, Punit Goenka had expressed his happiness and satisfaction that the new investors had reposed their faith in the promoters and existing management of Zee Entertainment.
Highlighting how things have deteriorated, he wrote: “This is Pawan Goenka in Jul-19 when they agreed to bail out promoters by buying 11% of ZEEL for ~4500 crore. With today's market move, will be difficult for promoters to convince anyone w.r.t. retaining control.”
Before the AGM, proxy advisory firm Institutional Investor Advisory Services (IiAS) had advised shareholders of Zee Entertainment, not to re-appoint independent directors, Ashok Kurien and Manish Chokhani, on the company's board.
As of now, Punit Goenka of Zee has not stepped down at yesterday’s AGM while presenting a big plan for the coming years. Whether he will finally be shown the door when the EGM called by the two large shareholders is held will be known when it takes place.
In 2019, Subhash Chandra Goel and his family sold most of their stake in Zee Entertainment, which he founded in 1992, going from 41% to less than a 5% holding in the company. They had to successively dilute their stake to pay for accumulated debt at both company and group level. The beleaguered promoters are still hoping to retain their control over the management, though it appears  to be an uphill task currently.
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