NEW DELHI: The tussle between ZEE Entertainment Enterprises Limited (ZEEL) and its shareholders over the re-appointment of directors is all set to get nastier as the board of directors of ZEEL has decided to back non-executive directors Ashok Kurien and Manish Chokhani. The ZEEL board has in a statement said that it strongly condemned the allegations made by ‘certain proxy advisory firms’ against its former non-executive directors, Kurien and Chokhani.
“Speculations disparaging the contribution of the said non-executive directors of the company are baseless and arise out of inadequate understanding of the industry. Decisions taken by committee members and the board of directors of the company are being wrongly attributed to individual directors without any basis,” the board said.
This was after proxy advisory firm Institutional Investors Advisory Services (IiAS) had raised serious corporate governance concerns pertaining to the company by asking shareholders not to vote for re-appointing the duo on the company’s board at the AGM.
IiAS had raised concerns on their (the directors in question) failures as audit committee members in 2019-20, when the auditors qualified the financial statements over related party transactions and raised concerns over the adequacy of the company’s internal financial control. According to IiAS, both directors, as members of the nomination and remuneration committee, failed to address the governance issues raised by independent directors who eventually resigned.
It has been alleged that ZEEL managing director and CEO Punit Goenka’s remuneration increased by 46% while employees got no raises during the year. Two of ZEEL’s foreign portfolio investors — Invesco Developing Markets Fund and OFI Global China Fund — who together hold 17.88% stake in the company, have also demanded the removal of Kurien and Chokhani and Punit Goenka from the board, and proposed the appointment of six new independent directors.
Governance Issue
According to proxy advisory firm IiAS, both directors, as members of the nomination and remuneration committee, failed to address the governance issues raised by independent directors who eventually resigned