Shareholders To Debate Punit Goenka’s Reappointment At Zee

Punit Goenka, MD and CEO of Zee is preparing for his exit in December 2024. He has been the CEO of the company for more than 15 years. But there hasn't been a conversation on his reappointment with shareholders. During the Q4 FY 2024 results call on May 17, Goenka stated that they would finally decide if he stays in this position.

Zee has successfully navigated plenty of business opportunities and obstacles under his direction. According to Sebi (Securities and Exchange Board of India) reports, Goenka and his father Subhash Chandra, who is also the Chairman Emeritus of the company, are being investigated for possible financial malfeasance.

Shortly after the $10 billion Zee-Sony merger was allowed by the NCLT (National Company Law Tribunal) on August 14, 2023, Zee promoters Punit Goenka and Subhash Chandra were prohibited by Sebi from assuming important managerial roles in either the Zed enterprises or the newly merged entity with Sony. On the other hand, Sebi's decision to bar Goenka from holding any managerial positions in listed businesses for a year was overturned by the Securities Appellate Tribunal (SAT) on 30 October.

Zee promoters persisted in expressing faith in the merger agreement, which finally fell through in January 2024, notwithstanding SEBI's ruling and other ongoing legal actions.

Since then, the business has faced difficult times including reorganisation, layoffs and a sharpening of its strategic emphasis.

As the December quarter FY24 financials were being released, Goenka referred to laying up a solid and organised strategy to boost margins. His plan called for the company's future strategy to be focused on three main areas: optimisation, frugality and a laser-like emphasis on high-quality content.

A few months later, Goenka stressed thrift once more during the earnings call for the FY 24 Q4 results. He claims that in order to generate sustained long-term growth, it is imperative that businesses pivot to reach a balanced cost structure.

"With that backdrop, we are looking at every element of the business with the lens of improving the overall performance. As a result, we expect some short-term aberration in digital business financial performance."

The next quarter, Zee reported a net profit of Rs. 13.35 crore for the quarter that ended March 2024. During the same quarter last year, Zee reported a loss of Rs. 196 crore. The company disclosed a total income of Rs 2185.29 crore. This is an increase from Rs. 2126.35 crore that the company reported a year ago during the same period.

While the company’s board and shareholders face a crucial decision that could impact the direction of the company, stakeholders are keenly watching for any indications, strategic shifts or continuity plans.