Zee Entertainment Enterprises' board has accepted the resignation of Chairman Subhash Chandra, the company said in a BSE filing on November 25.
Chandra had expressed his intention to resign as the chairman in light of the changes in shareholding, the company said.
“The Board accepted his resignation and noted that this is in line with the requirements of Regulation 17 (lB) of SEBI Listing Regulations, which inter alia mandates that the Chairperson of the Board shall not be related to the Managing Director or the Chief Executive Officer of the Company,” the company said in its stock filing.
Chandra will continue as a non-executive director.
It was only last week when the company had announced the sale of 16.5 percent stake in Zee to clear loan obligations to certain lenders of the Essel Group.
After the recent stake sale (16.5 percent), the total holding of Essel Group in Zee has come down to around five percent, while the encumbered holdings is down to around 1.1 percent of Zee from 10.7 percent earlier.
In an earlier interview with Moneycontrol, Utkarsh Sinha, Managing Director, Bexley Advisors had said, “Essel Group will be left with a token stake and they will have a financial interest in Zee."
On November 25, shares of Zee saw a decline after Kotak Institutional Equities downgraded its rating for the stock.
According to Kotak, unwinding and/or write-off is important to rebuild investor confidence.
The brokerage firm is also not optimistic about advertising revenue as it said that ZEE’s viewership market share has declined from its peak in the second half of FY19 led by some weakness in the ratings of Zee TV, Zee Telugu and FTA (free to air) channels.
While there is uncertainty looming over Zee, the silver lining is that out of 16.5 percent stake in Zee, 2.3 percent stake in the media company will be sold to OFI Global China Fund, which is a subsidiary of Invesco Oppenheimer Developing Markets Fund, that already holds 8.7 percent stake in Zee.
Invesco has been an investor in Zee since 2002.
"The fact that they (Invesco) wanted to increase their stake even via subsidiary route is a positive signal. It is always a positive signal when an existing investor doubles down. Invesco is a seasoned hand in Zee," Sinha had said.