Proxy firms push back against Zee promoters' warrant plan

Zee Entertainment Ltd's share price has increased since sinking to a 12-month low of ₹89.29 in March

- Nehal Chaliawala

Three proxy advisory firms have recommended that shareholders of Zee Entertainment Enterprises Ltd vote against a proposal that would effectively address the promoters' Achilles' heel—their minuscule shareholding.

Stakeholders Empowerment Services (SES), InGovern and Institutional Investor Advisory Services (IiAS) have called for rejecting Zee's plan to issue preferential warrants to two promoter entities led by the company's founder and chairman emeritus, Subhash Chandra. The warrants, upon conversion, would lift the promoters' stake from 3.99% to 18.39%.

The proxy advisory firms cited pricing, the rationale for raising funds through warrants and the choice of the financial instrument as the key reasons for their recommendation.

A spokesperson for Zee rejected the recommendations of the proxy advisory firms, arguing that the company's decision was taken by an experienced board in the shareholders' best interests.