Independent directors Ashok Kurien and Manish Chokhani have resigned ahead of the Extraordinary General Meeting
Zee Entertainment Enterprises’s shareholders Invesco Developing Markets Fund (formerly Invesco Oppenheimer Developing Markets Fund) and OFI Global China Fund llC have called for a extraordinary general meeting (EGM) of shareholders seeking to remove Punit Goenka, MD, ZEEL, from the board along with two independent directors–Ashok Kurien and Manish Chokhani. Invesco and OFI Global China Fund IIC have put forth Surendra Singh Sirohi, Naina Krishna Murthy, Rohan Dhamija, Aruna Sharma, Srinivasa Rao Addepalli and Gaurav Mehta’s names for the position of Independent directors of the board.
As per the late evening statement to the stock exchanges, Zee Entertainment said that the two shareholders hold for 18% of the company share and are seeking to appoint six of its own nominees on the board of Zee. However, just ahead of the EGM on September 14, 2021, Ashok Kurien and Manish Chokhani resigned from the board of the company. This move comes after proxy advisory firm Institutional Investors Advisory Services (IiAS) raised corporate governance concerns in the company by asking shareholders not to vote for re-appointing the duo on the company’s board at the EGM.
Invesco said as ZEEL is required to seek an approval from the Ministry of Information and Broadcasting in connection with the appointment of the new independent directors, it has enclosed the relevant declarations and information required from each of the proposed Independent Directors. “Accordingly, we request the company submit an application with the Ministry seeking approval for the appointment of the proposed independent directors at the earliest,” it said.
According to IIAS, Ashok Kurien was the founder of the Zee group and while the company has reclassified him as a non-promoter, no requisite regulatory filings or shareholder approval was sought for the same, and hence it classifies him as a promoter. “Having the erstwhile promoters on the board may impede the directors’ ability to take hard decisions,” it said. Meanwhile, Manish Chokhani, IIAS claims was on the audit committee in FY20 and was accountable for the losses against related party transactions, which resulted in significant erosion in shareholder wealth.