Billionaire investor Rakesh Jhunjhunwala bought 50 lakh shares of Zee Entertainment Enterprises Ltd. (ZEEL) for about Rs. 100 crore yesterday (14th September) just as two of its directors resigned following a demand by two foreign portfolio investors for an extraordinary general meeting to oust three directors including MD and CEO Punit Goenka. The two directors who resigned on 13th were Ashok Kurien and Manish Chokhani, both of whose ouster had been demanded by the two investors — Invesco Oppenheimer Developing Markets Fund and OFI Global China Fund. The investors, who together hold 18% of the company’s shares also want to put in six of their nominees as directors on ZEEL’s Board.
Besides the buying by Jhunjhunwala of around 0.5% of the company, a fund managed by Bank of America also bought around 49 lakh shares the same day. Across the BSE and the NSE, nearly 22 crore shares of Zee changed hands on 14th. As a result, the stock of the company closed with a 40% gain at Rs. 262 on the BSE after rallying 45% in the session on 14th.
At the annual general meeting of ZEEL on 14th September, chairman R. Gopalan made no mention of the two investors’ move to rejig the Board. Shareholder Aspi Besania remarked, “Invesco seems to be having problems with the company but it is not sharing its issues with shareholders. Why should we vote in favour of its proposals?” Krishnan from Madras said, “The developments are telling on Zee stock. The market has welcomed the move.”