Media mogul Subhash Chandra has resigned as chairman of his flagship company Zee Entertainment Enterprises Ltd (ZEEL), with immediate effect.
While accepting his resignation, the board said this is in line with the Sebi Listing Regulations that prohibit chairperson of the board from being related to the managing director or the chief executive officer of the company, ZEEL said in a regulatory filing on Monday.
The firm also said its board has been reconstituted and three new independent directors R Gopalan, Surendra Singh and Aparajita Jain have been appointed in lieu of two independent and one nominee directors of Essel Group, promoter of Zee Entertainment.
The reconstituted board consists of six independent directors and two members from the Essel Group.
“The reconstitution of the board was to strengthen and induct independent members with varied experiences to build value and provide a strong signal to the existing and new institutional investors who have recently reposed their faith in the intrinsic value of the company, by investing Rs 4,770 crore,” ZEEL said in a regulatory filing.
In September, the group had sold 11% stake in ZEEL to Invesco-Oppenheimer fund for over Rs 4,224 crore and then retired debt worth Rs 4,000 crore. Atlanta-based Invesco already held 7.74% stake in ZEEL since 2002.
Chandra will remain the company’s non-executive director, which he founded in 1992, it added.
“The board accepted his resignation and noted that this is in line with the requirements of Regulation 17(IB) of SEBI Listing Regulations, which inter alia mandates that the chairperson of the board shall not be related to the managing director or the chief executive officer of the company,” the firm said.
His resignation comes at a time when debt-ridden Essel Group is looking to further divest promoters stake in the company to repay the debts.
Promoter and promoter group shareholding in the company went down to 22.37% in the quarter ended September 30, from 35.79% in the quarter ended June 30.
The Subhash Chandra-led cash-starved Essel Group on November 20 said it is planning to sell 16.5% stake in its flagship ZEEL to financial creditors to meet its loan repayment obligations.
In a related development, ZEEL’s board also accepted the resignation of two independent directors Neharika Vohra and Sunil Sharma, with effect from November 24 as part of the process. It has also accepted the resignation of its company secretary M Lakshminarayanan and appointed Ashish Agarwal.
“In view of changes in the promoter shareholding in the company and reconstitution of the board (being intimated separately), M Lakshminarayanan, has resigned as chief compliance officer and company secretary and the key managerial personnel of the company, with effect from the close of business on November 25, 2019,” it said.
Gopalan, 67, is a former bureaucrat and the country’s former finance secretary. While Surendra Singh, 63, is a retired police officer and Aparajita Jain, 39, is a contemporary art professional.
“The board also intends to onboard members who would bring additional skill sets including digital transformation,” said ZEEL adding the reconstituted board “conducted their first meeting today, which was chaired by Gopalan”.
ZEEL has reported a revenue of ₹6,857.86 crore for 2018-19.