How retail investors of Zee blocked proposal to reappoint Punit Goenka as director

In a rare instance of retail shareholder activism in India, the small shareholders of Zee Entertainment have defeated the proposal to reappoint Punit Goenka as a director. This, despite the fact that Goenka managed to secure a majority in terms of institutional investor votes, data analysed by Moneycontrol from stock exchange filings showed.

In the AGM that was held on Thursday, Punit Goenka lost the reappointment bid with a wafer-thin margin of less than 0.5 percent as 50.5 percent votes polled went against the proposal. Within institutional investors, 52 percent voted in favor of Goenka’s appointment but the retail investors overwhelmingly voted against the proposal tilting the scale. According to the data, 88 percent of retail investors voted against appointment of Goenka while only 12 percent supported.

The development assumes significance since generally India’s retail investors do not participate much in shareholder activism or defeat any major proposals. Governance experts said the average retail turnout for such voting is around 3-5%. However, in the case of Zee, 13% of retail shareholders cast their vote  rejecting Goenka’s reappointment.

Market participants said retail investors of Zee have been miffed with Goenka ever since the potential $10-billion merger between Zee and Sony fell through in January.  During the time, both Zee and Sony executives accused each other of not honouring the deal commitments. Shares of Zee Entertainment lost over 54 percent in calendar 2024 so far following the news of deal fallout. On Friday at 10:30 am, Zee Shares were trading 5 percent higher at Rs 129.25 apiece.