India's Zee Entertainment surges after top investors call to remove directors

BENGALURU, Sept 14 (Reuters) - Shares of India’s Zee Entertainment Enterprises Ltd soared 40% on Tuesday in a record daily gain after top shareholders called for a management reshuffle, including the exit of its chief executive officer from the board.

Shareholders Invesco Developing Markets Fund and OFI Global China Fund, which together hold a 17.88% stake in Zee, in a letter asked for the removal of CEO Punit Goenka and two others as directors, Zee said late on Monday here.

The investors also asked for the appointment of multiple independent directors to the media and entertainment company.

Zee, which has a presence in television broadcasting and digital media with brands such as Zee TV, said it was examining the letter. Reuters could not immediately reach the investor funds for comment.

Separately, Zee said on Monday here that directors Manish Chokhani and Ashok Kurien, who the investors wanted to remove, had resigned.

The development comes days after proxy advisory firm Institutional Investor Advisory Services (IIAS) raised fresh corporate governance concerns at Zee Entertainment and asked shareholders to vote against reappointing Chokhani and Kurien as directors.

Among other concerns, IIAS alleged Kurien and Chokhani were accountable for a 46% increase in Goenka’s remuneration for fiscal year 2021, higher than what shareholders approved in the 2020 AGM.

Zee did not immediately respond to a request for comment.

“This can be a positive move for the company as appointing new directors might improve its corporate governance and oversight of the business,” Likhita Chepa, senior research analyst at CapitalVia Global Research, said.

Zee is set to hold its annual shareholder meeting later in the day.

Shares of other group companies such as Zee Media, Zee Learn and Dish TV India jumped between 5% and 19%, following the funds’ call to remove the Zee Entertainment directors.

Zee Entertainment shares recovered its losses for the year following Tuesday’s gains. (Reporting by Rama Venkat in Bengaluru; Editing by Shounak Dasgupta)