A freelance market for years and a steady state publisher, Indian businessman Subhash Chandra was also an amazing pioneer of television entertainment here.
Founded in 1992 as India’s first home-based business venture, its Zee TV provided viewers with games featuring traditional banners, rehearsals and art competitions – far removed from government loyalty.
Today, Chandra, a 70-year-old member of parliament, is in the middle of a drama playing the role of India’s HBO’s Succession, as she fights for her son Punit Goenka to lead Zee – now India’s largest company named – in front of attacks on shareholders.
Unhappy with Zee’s share price on the volatile Indian market, the US financial group Note, which is the largest company with a share of 18%, last month launched a campaign to remove Goenka as CEO and direct the committee, citing the challenges of corporate governance.
Chandra, whose family now owns only 4% of Zee, down by 35% in early 2019, opposed Invesco’s request to hold an extraordinary meeting in court, calling for a kind of anti-US sentiment.
The demonstration is a difficult test for the shareholders’ ability to respond to well-known Indian businessmen when they fail to live up to their expectations.
“The message is, if you are running a business with very little money, you need to make sure it is a successful business,” said Amit Tandon, executive director of Institutional Investor Advisory Services, which has repeatedly raised concerns about Zee’s administration.
Its effects will also contribute to India’s growth but nonetheless an indivisible retail market, with major international groups including Disney and Sony, promoters and local rivals battling it out responsibility. Companies that want to partner with Zee include Sony Reliance Industries and Mukesh Ambani.
The war over control of Zee, said another money broker, “will be great. It could change the whole way the entertainment sector works “.
Zee’s approach to cheap and entertaining marketing has made it a bull and one of India’s most popular brands: with 19% of TV viewers in the country, second only to its Star, a longtime enemy, bought by Disney in 2019.
“Zee is beautiful to most people,” Tandon said. “It’s a good business that makes money and is very active in the Indian market.”
Paritosh Joshi, a former Star chief, said the wars to buy media businesses in India were fought by “teeth and blood”.
Lowering the share price and strained relationships
Chandra, who is a close ally of the ruling Bharatiya Janata Party, faced financial difficulties in exchange for construction, and in 2019 was forced to sell most of her Zee to repay bank loans.
Invesco, a long-term shareholder, took 11% stake in Zee from Chandra, raising its share to 18%, while Chandra and Goenka remained in office and senior.
However, his relationship with the first family stabilized over the past two years, when the price of Zee shares fell and it began to worry about how the business was run.
Invesco informed the public of their concerns on September 11, demanding that Zee call on EGM for shareholders to vote on Goenka’s removal and reorganize the committee.
The agency declined the invitation and, in its first look at Zee News, Chandra criticized Invesco for acting “illegally and unlawfully,” and said it represented an unnamed organization that wanted to take over the business.
“There has to be someone behind this,” Chandra said. “This is a clear case for the company to take stock secretly.”
In a subsequent letter to shareholders, published this week, Invesco emphasized that “the EGM system is a shareholder”. The letter further stated that the existing committee “allowed Zee to be deeply affected by the financial problems of the founding family”, which led to her dissolution.
Invesco said it encouraged Zee’s management to stay away from the “long shadow” of other family initiatives and encouraged opportunities to form a partnership.
But because nothing changed, Zee remained “a very cheap man, very busy with economic instability” and the letter was received.
Suit from Sony
Just 10 days after Invesco’s first revolt, Zee unveiled a $ 1.6bn plan In combination with Sony which would give the Japanese company 53 percent inclusive, leaving Goenka as CEO. As part of the “non-competitive” part of the deal, Sony will also give the family another 2% share.
Invesco vehemently denied the allegations, which it said favored the founders in collaboration with other shareholders, although it said the new committee would consider a revised proposal from Sony or other potential partners.
Invesco on Wednesday said Goenka had negotiated with Reliance on what could be included this year but negotiations did not lead to a deal.
“Sony’s recent interest, as well as its past interest in Reliance, should be a reminder to all Zee stakeholders of the huge profits available to the company, in stark contrast to its operations,” Invesco said.
Sony has declined to comment on Zee’s agreement, but sources close to the company said that although the deal appeared to be difficult and with some demonstrations, the group had already completed some foreign operations that took place unexpectedly.
In a statement in late September, Sony said it had started a 90-day campaign on Zee. People familiar with the company’s negotiations said they were still working on the project, and will continue to be “observers” of Invesco’s situation.
People living near Sony say it is working out thinking that once the deal is done, the Japanese company will work with the founding family. But he also said Sony had met with leadership in India, which would allow the project to operate without a family.
Taking Zee without a founder, the people said, it was not the choice they wanted, but if there was no other way, the partnership would still be beautiful and viable.
In the meantime, Invesco and Chandra are being dug up for the long haul.
“Zee is not a company – it’s fun,” Chandra told Zee viewers last week. “The audience is their own. If he wants the company to go, I can’t do anything. But I trust them – and the government – that they will not allow this to happen. ”