(Bloomberg) -- Media conglomerate Zee Entertainment Enterprises Ltd.’s stock surged after shareholders rejected the proposal to re-appoint Punit Goenka, founder’s son and Chief Executive Officer, as a board director.
Zee’s shares rose as much as 7.8%, highest in over five weeks, during trading in Mumbai, data compiled by Bloomberg show. The entertainment firm informed exchanges late on Thursday that 50.46% of the shareholder votes cast were against Goenka’s reappointment.
The outcome shows shareholder resentment toward Goenka who was at the center of a stalemate between Zee and Sony Group Corp.’s planned merger. It collapsed in January over disagreements on whether Goenka should lead the merged entity amid a probe by India’s capital markets regulator on Zee’s founders.
Earlier this month, Goenka resigned as the company’s managing director but said he wanted to continue as the broadcaster’s chief executive officer, which had also spurred a rise in shares.
The founders now hold barely 3% in the company, with the rest owned by institutional and retail investors.
Once a dominant player in India’s media landscape with its bouquet of local television channels and a deep library of regional language content, Zee’s fortunes have nosedived in recent years.
The stock has plunged almost 45% since the deal with Sony fell apart. Rivals, meanwhile, have bulked up. Walt Disney Co. has merged its India unit with Viacom 18 Media Pvt. — a part of billionaire Mukesh Ambani’s media empire — creating a $8.5 billion behemoth.
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