LIC, mutual funds opposed Punit Goenka as Zee MD

livemint.com:

Subscribe to enjoy similar stories. Officials of Life Insurance Corp. of India (LIC) informed executives of Zee Entertainment Enterprises Ltd at a shareholder outreach programme that they would not back another five-year term for Punit Goenka as managing director, three people aware of the matter said.

Goenka resigned as MD of Zee on 18 November, a month after its board recommended another five years for him as MD and CEO, and 10 days ahead of an annual shareholders' meet, after which the voting outcome on his candidature would be announced. The decision followed the view expressed by its largest shareholder, as well as recommendations by two proxy advisors to reject his continuance at the helm of the media conglomerate. Goenka said he wanted to focus entirely on his operational responsibilities and offered to continue as the company’s CEO, which the Zee board accepted.

LIC owns 4.63% stake in Zee, while founder and chairman emeritus Subhash Chandra and his family own 3.99%. Out of about 15 mutual funds which together owned 12.4% in Zee at the end of the September quarter, at least two holding more than 1% each backed LIC, the people cited above added. Calvert Research and Management, part of Morgan Stanley Investment Management and the City of New York Group Trust, with about $200 billion of assets under management, rejected Goenka's reappointment, according to filings reviewed by Mint.

"He has resigned as MD of the company and continues as CEO. Shareholders may question if any revision in the remuneration structure is warranted due to change in his role and scope of his responsibilities," reasoned Calvert. "The proposed pay is competitively positioned in comparison to industry peers.