Zee Entertainment Investors Renew Board Reshuffle Demand: Report

Top shareholders of Zee Entertainment Enterprises renewed their call for an extraordinary general meeting to remove Chief Executive Punit Goenka from the board, the Business Standard reported, citing a letter. The letter from Invesco and OFI Global China Fund dated September 23 follows the company's disclosure of a merger deal with Sony Group Corporation's India unit last week. Invesco and OFI did not immediately respond to Reuters request for comments, while Zee said it will take necessary action as per the law.

According to the Zee-Sony deal, the majority of directors of the merged entity will be named by Sony Group, while Goenka will become the managing director and CEO. The deal was expected to ease the pressure Zee was facing from Invesco and OFI, which together hold a 17.88 per cent stake, for a management reshuffle.

However, in the letter, the two shareholders said Zee's disclosure of the deal was "symptomatic of the erratic manner in which important and serious decisions have been handled at the company."

Earlier this month, Invesco and OFI had asked Zee to remove Mr Goenka and two directors and sought the appointment of independent directors to the media and entertainment company.

Last week, Zee and Sony signed an exclusive, non-binding term sheet, creating a television powerhouse with about 75 news, entertainment, sports and movie channels in more than 10 languages. The combined entity would be India's biggest player, with a market share of 27 per cent, outstripping that of top rival Walt Disney Co. The two companies will conduct due diligence and finalise definitive agreements in 90 days to present the merger proposal to shareholders, they said.

Zee shares fell as much as 5.3 per cent in morning trade.