The shares of Zee Entertainment Enterprises Ltd. (ZEEL) rallied up to 7% during early trading hours on November 29, following a shareholder decision to reject the resolution to reappoint Punit Goenka as a director on the company’s board. This outcome was declared during ZEEL’s Annual General Meeting (AGM).

The pivotal agenda item at the AGM, Goenka’s reappointment as a director, was narrowly defeated, with 50.4% of shareholders voting against it and 49.5% in favour. ZEEL, in an exchange filing, confirmed that the resolution did not secure the requisite majority under the Companies Act, 2013, and SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

Goenka, who also serves as ZEEL’s Chief Executive Officer, has long been a key figure in the company’s strategic growth. However, his reappointment has faced pushback amid increasing investor concerns. This isn’t the first time Goenka has encountered resistance; in 2021, Invesco, then ZEEL’s largest shareholder, demanded his removal, citing governance issues.

The rejection of Goenka’s reappointment comes at a time when ZEEL has been grappling with challenges, including its failed $10-billion merger with Sony. The merger, once billed as a transformative deal that would have created one of India’s largest media conglomerates, collapsed earlier this year.

Although Goenka’s family owns approximately 4% of ZEEL, they have retained significant management control. However, the voting outcome suggests growing dissatisfaction among shareholders, particularly institutional investors, over the company’s direction and governance practices.

While Goenka’s reappointment was rejected, shareholders approved other key resolutions during the AGM. These included the sdoption of the audited standalone and consolidated financial statements for FY23-24, the declaration of a Rs 1 per equity share dividend for FY23-24, and ratification of the cost auditors’ remuneration. The rejection of Goenka’s reappointment overshadowed these approvals.

ZEEL shares surged in early trading on November 29. The stock climbed over 6% to trade at Rs 130.65 per share on the National Stock Exchange (NSE) by 9:40 am. However, ZEEL’s stock has struggled over the past year. It has delivered negative returns of nearly 48% in the last 12 months, with a steep 55% decline in 2024 alone.