Sumary of After ZEE stock surge, D-Street waits to see if CEO Goenka gets the boot:
- Much of Tuesday’s investor enthusiasm built up around a possible cleaning up of the business after the company’s largest investor, Invesco Oppenheimer, pushed for an ouster of Goenka, the elder son of the company’s founder Subhash Chandra Goenka.
- Even ace investor Rakesh Jhunjhunwala, through his investment firm RARE Enterprises, put in a large bet on the development by purchasing some 50 lakh shares.
- ZEE investors have weathered many a storm over the past three years, with the latest adverse development being allegations of fresh corporate governance issues at the company.
- For ZEE minority investors, Tuesday’s big rally came as a much-needed relief.
- The demand came after proxy advisory firm Institutional Investor Advisory Services (IIAS) raised corporate governance concerns in the company, asking shareholders to vote against reappointing two directors — Manish Chokhani and Ashok Kurien.
- Before the company’s hunt for a strategic investor yielded result, Chandra in an open letter on January 25, 2019 admitted to making strategic mistakes in unrelated infrastructure business that led to a spike in debt and share pledging at promoter levels.
- Gupta said retail investors do not have any say at an EGM and it is generally institutions that vote.
- We as proxy advisors do not have domain expertise and we cannot comment.