Proxy advisory firm Institutional Investor Advisory Service (IiAS) has raised concerns against Subhash Chandra-backed Zee Entertainment Enterprises Ltd regarding corporate governance. IiAS has advised shareholders to vote against the re-appointment of Manish Chokhani and Ashok Kurien to the board of directors.
Earlier this week, Chandra’s brother Jawahar Goel’s Dish TV also came under fire, when YES Bank proposed to oust the company’s entire board of directors including Goel.
IiAS said that “Manish Chokhani was on the Audit Committee in FY20 and is accountable for the losses on account of related party transactions, which resulted in significant erosion in shareholder wealth.
‘No accountability for losses’
As a member of the Nomination and Remuneration Committee (NRC), he is accountable for not professionalising the board, especially given that promoter equity has declined to less than five per cent. He is also accountable for the failure to address and adequately deal with governance concerns that led to the resignation of independent directors in the past.”
IiAS also said as members of the NRC, Chokhani and Kurien are also accountable for the poor management of Punit Goenka’s remuneration, which was increased by 46 per cent. This was higher than what shareholders approved in the 2020 AGM. Meanwhile, employees were given no raise for FY21.
Zee denies allegations
However, a spokesperson for Zee rebutted the views of IiAS. “The company reiterates that, the NRC has finalised the overall remuneration framework, after a structured evaluation process and has implemented the same with the approval of the Board. During the last few years the Audit Committee has introduced various policies and measures in order to further strengthen the company’s governance standards with a sharper focus on transparency.
“The said Directors have played an active role in institutionalising the governance standards based on their rich expertise and experience. Accordingly, the NRC and the Board (comprising of majority independent Directors) have unanimously recommended the re-appointment of the Directors to the shareholders. Other credible proxy advisors, including certain reputed international firms, have recommended voting in support of the appointments,” the spokesperson said.
Other proxy advisory firms SES and ISS have asked shareholders to vote in favour of the reappointments.