Zee Entertainment's largest shareholders, Invesco Developing Markets Fund and OFI Global China Fund LLC, which own a combined 17.88% stake in the company, have called a special shareholders’ meeting of the media company, seeking removal of Punit Goenka from the post of Managing Director.
With recent instances of shareholder activism seen in Balaji Telefilms, Dish TV, Vedanta and Eicher Motors, ET NOW’s managing editor Nikunj Dalmia says, “This is a new beginning for India. In Indian firms, the promoter holding is generally so large that this kind of shareholder activism was never possible.” But, the tide is now changing.
Explaining ZEE’s case further, he says, “The challenges for the company started when it informed that there are personal liabilities on the balancesheet. The large shareholders feel that there are corporate governance issues and the current management is not creating enough value in the company. In the last couple of years, innovation has stopped.”
Coming to the stock movement, he says that the scrip has hardly participated in the current bull market. “The stock may twist and turn, but the inherent value and the brand image will ensure that the downside is limited,” he concludes. Watch for more.