Zee board backs Ashok Kurien, Manish Chokhani
Three days after Manish Chokhani and Ashok Kurien resigned from the position of Non-Executive Non-Independent Directors of Zee Entertainment Enterprises Ltd., the board of directors of the firm released a statement in support of the former directors.
It condemned the allegations made by proxy advisory firms against Chokhani and Kurien. Zee said the speculations disparaging the contribution of Chokhani and Kurien are 'baseless' and arose out of inadequate understanding of the firm. The statement added that the decisions taken by committee members and the board of directors of the company are being wrongly attributed to individual directors without any basis.
In a report released ahead of Zee's annual general meeting, proxy advisory firm IiAS had advised shareholders to vote against the reappointment of Chokhani and Kurien because they were members of the audit and remuneration committees. The latter panel had approved a 46 percent rise in Goenka's pay for FY21; employees received no raise. The proxy advisory's co-founder Amit Tandon also said that as members of the audit committee in FY20, the two directors have "to take ownership of the losses on account of related-party transactions, which resulted in a significant erosion in shareholder wealth.
Further, a day ahead of the AGM, separately, Zee's largest shareholders Invesco Developing Markets Fund and OFI Global China Fund LLC -- together holding 17.88 percent of the total paid-up share capital of the company -- called an extraordinary general meeting (EGM) seeking the removal of MD and CEO Punit Goenka, Manish Chokhani and Ashok Kurien.Close
Chokhani and Kurien resigned one day before the AGM and Zee cited that as the reason for not releasing the results of voting for their re-appointment. On 14th September, when the news about Invesco's challenge and the director's resignation broke, the Zee share ended 40 percent higher against the previous close on BSE. Since then it has shed 5.5 percent to close at Rs 247.05 on Thursday.
The Zee statement reiterated that both directors decided to step down from the board due to their personal reasons and had been advisors to several leading companies during their distinguished careers.The focus now shifts to the EGM which the Zee board will have to call within 21 days of receiving the letter from Invesco. The investor has sought to appoint six new independent directors, said company said in a regulatory filing on September 13. The proposed directors include Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli, and Gaurav Mehta.