Even if the stock takes a knock, there is nothing that can stop Zee Entertainment Enterprises CEO & MD Punit Goenka and the promoter family he belongs to from continuing to call the shots with a tiny equity stake, if other shareholders in the company once again choose to give him a long rope. Our Bureau explains:
Will that change?
So far, it hasn’t and chances are it won’t – at least for some time. Local and offshore financial institutions, which own about 61% in the company, may set a timeframe and wait for Goenka to find a ‘white knight’ – probably private equity investors. Also, they will await Sebi’s final report on the company and the final court decision on the matter.
Also read: How and why curtains fell on a mega media deal that was two years in making
So, the present promoters continue?
De-promoterisation, or declassification of promoters, is typically a process initiated by a promoter who informs the board after its shareholding falls below 10%, among other things. The board takes it on record, stock exchanges are informed of the decision, and, finally, shareholders pass the resolution. So, it’s voluntary. It’s a step taken by promoters who no longer want to shoulder the liability (of being a promoter). But, in Zee, the story so far has been the opposite – the promoters as well as the CEO have been keen to continue in their respective roles.
Also read: End of Zee-Sony deal may trigger a spate of legal wranglings
But, can’t shareholders push for a change?
If shareholders having 51% of the votes come together, they may seek the removal of a director. But it’s rare in a corporate landscape devoid of shareholder activism.
