Proxy firms urge Zee shareholders to reject promoter warrant plan

In a move stirring debate among investors, India’s top proxy advisory firms have recommended that Zee Entertainment Enterprises Ltd (ZEEL) shareholders vote against the company’s proposal to allot 16.9 crore warrants to promoters for ₹2,237 crore.

This proposed allotment would significantly increase CEO Punit Goenka and his family’s shareholding from 3.99% to 18.39%, raising concerns over control and dilution.

Concerns Over Governance and Shareholder Dilution

Governance experts have flagged multiple red flags with this deal.

The main concern is the sharp rise in promoter control, which could come at the cost of public shareholders, whose holdings will be significantly diluted if the warrants are issued.

The shareholder vote on this special resolution is scheduled to take place between July 6 and July 9.

No Immediate Capital Requirement, Say Advisors

Adding to their opposition, proxy firms noted that Zee doesn’t currently have any pressing capital needs.

The company had cash and equivalents of ₹2,240 crore as of March 31, 2025, meaning the warrant issuance may not be necessary from a financial standpoint.

This has further raised questions about the intent behind the move and the timing of the promoter allotment.

Background: Shareholders Had Opposed Goenka’s Appointment

It’s worth noting that in 2023, shareholders had rejected a resolution to appoint Punit Goenka as managing director, highlighting past governance tensions between the board and public investors.

The fresh attempt to increase promoter shareholding now revives those concerns, especially given that the company is yet to resolve its broader leadership and structural challenges.