Proxy advisory firm flags 'crisis' at Zee Ent, co rejects claims

MUMBAI: Shareholder advisory firm InGovern has turned up the heat on Zee Entertainment Enterprises, calling for the appointment of a professional managing director, a forensic audit of related-party transactions, and other governance reforms.

InGovern said Zee is witnessing a deepening crisis of confidence, with promoters exercising substantial operational control despite holding a stagnant equity stake of less than 4%. The proxy advisory firm flagged what it described as a significant governance vacuum at the company. Although shareholders rejected Punit Goenka's reappointment as a director in Nov 2024, he continues to lead the company as CEO, a move InGovern said effectively bypasses the shareholder mandate.

InGovern also pointed out that the promoters, the Goenka family, have around Rs 500 crore in liquidity, enough to buy a 5% stake in Zee, but have chosen not to deploy it, calling such an investment "not meaningful". "This contradicts standard confidence-building measures where promoter buying is typically seen as a positive signal," the firm said.

Responding to the report, a Zee spokesperson rejected the allegations, calling them "factually incorrect, misleading and prejudiced". "The report consists of certain dated issues, which have already been addressed by the company," the spokesperson said, adding that the absence of new points, coupled with "multiple factual inaccuracies, misrepresentation of facts and lack of basic diligence questions the intent of the firm behind the report".

The spokesperson added that the company issued a detailed rebuttal to InGovern in response to what it called "baseless allegations."