Shares of ZEE Entertainment Enterprises Ltd will be in focus on Friday after shareholders at the company's 42nd Annual General Meeting on November 28 rejected a proposal for the reappointment of Punit Goenka as a Director. Goenka, who was Managing Director (MD) and Chief Executive Officer (CEO) at ZEEL, had earlier decided to step down from the MD role and focus entirely on his responsibilities as CEO.
He was also looking to stay on the ZEE board as a Director but as per BSE and NSE filings, the proposal failed due to 50.46 per cent votes going against it. A total of 49.54 per cent were in favour of the proposal.
Goenka had earlier resigned as MD to entirely focus on his operational responsibilities. Mukund Galgali, Chief Financial Officer, had assumed the role of Deputy Chief Executive Officer of the company.
JM Financial noted that the ZEEL’s board took two important decisions over the past few days. First, it set higher financial targets, including a definitive payout ratio, to evaluate Puneet Goenka’s performance as CEO. Second, it accepted Puneet Goenka’s resignation as MD of the company while appointing him as CEO.
"It not only makes Puneet more accountable, it also made the ball in shareholders’ court to determine extent of Puneet’s involvement in the board affairs. We find this balance – an empowered board and a transparent and measurable CEO evaluation metric – apt for ZEEL’s shareholders. Puneet’s continuation as CEO of ZEEL is critical for the operational turnaround of the company," JM Financial said.
"Our reverse-DCF and SOTP based valuation exercise highlight the extent of undervaluation. A more favourable board-CEO equation for shareholders, backed by consistent execution, can unlock value. We reiterate BUY with an unchanged target price of Rs 200," it said earlier.
An earlier exchange filing suggested that ZEEL's Goenka was investing significant time and energy to enhance the value delivery from the respective businesses by conducting a structured set of visits in all language markets in order to further sharpen the company’s abilities and understanding of its consumers and their evolving preferences.
"Goenka’s approach stems from his enhanced focus towards the core business segments and the concerted efforts required to drive robust growth for the future in the interest of all its stakeholders," ZEEL said earlier.
ZEE earlier suggested that Goenka was also working closely with the digital business teams to achieve a balanced cost structure for ZEE5 to drive sustained growth for the future.
Additionally, his focus has also been to enhance the value proposition to advertisers by identifying newer monetization avenues in order to boost the advertising revenue ecosystem for the company and sector at large, ZEEL added.