It was in the year 2004 that Puneet Goenka joined Zee TV as its business head. Star network was dominating the ratings at the time in viewership and ad spend, riding high on the success of Kaun Banega Crorepati and soaps like Kahani Ghar Ghar Ki and Kyunkii Saas Bhi Kabhi Bahu Thi.
During the same time, Zee TV was making the news for losing one CEO every year. That was also the time when former Times Group president Pradeep Guha joined Zee.
One of the first shows put together by the new Guha-Goenka team, Saat Phere – about a dark girl’s travails in a colour-conscious India – started airing on Zee TV in October 2005. Then came Kasamh Se in January 2006. Both became hits, and Zee began climbing up the charts. By December 2006, it was a clear and fresher number two in the Indian entertainment space. Its revenues were rising, and so too was its stock price. Star’s audience share, meanwhile, continued to tumble.
When Guha left in 2008, Goenka was named CEO. The sniggers were inevitable. Zee’s turnaround was firmly attributed to Guha’s acumen, since Goenka was just the “owner’s son”.
But he proved everyone wrong.
Under him Zee’s consolidated revenue has grown from just over Rs 1,950 crore in 2008 to Rs 7,700 crore in 2021. Analysts call it a ‘cash-spewing machine’.
So, when the company was under pressure from top investors for a management reshuffle, the Chandra-Goenka father-son duo found a white knight in rival Sony.
The transaction was expedited after one of the largest shareholders of ZEE, Invesco, sought an extraordinary general meeting for the removal of Goenka within three weeks. Here are details of the deal.
Zee shareholders are to own a 47.07% stake in the merged-entity, and Sony India 52.93%. Sony India will invest $1.57 billion as growth capital and transfer 2% shares of the merged entity to the Subhash Chandra family as part of a non-compete pact. The Chandra family will own a 4% stake in the merged entity, with the option to increase it to 20%. While Sony will appoint a majority of the directors on the board, Punit Goenka will be the CEO & MD of the combined entity.
But Goenka’s woes seem to be far from over. Invesco, the largest shareholder, with an 18% stake in Zee, is still gunning for him. Though it is saying it is not opposed to the company’s proposed merger, it wants the new board to evaluate the deal as well as decide on ‘future leadership’.
Let’s now take a look at a timeline of events to understand the scheme of things.
Invesco bought an 11% stake from the Chandra family on July 31, 2019, and became the largest shareholder, with an 18% stake. On September 11, 2021, it called for an EGM, seeking the removal of three non-independent directors, including Punit Goenka. The two non-independent directors quit two days later, Goenka did not. On September 22, 2021, Zee proposed a merger with Sony Pictures, with Goenka as the MD of the merged entity. The next day, Invesco said it remained firm on the EGM demand bit it was not against the proposed merger.
While Punit Goenka would have to carefully deal with the present situation, we spoke to Vanita Kohli-Khandekar to know more about Goenka and how he is different from his father.
Here are excerpts of what she said:
Goenka is unflappable
He set up Broadcast Audience Research Council
He did MediaPro deal with Star
He says he is not a visionary like his father
Puneet is great at running the business
His team has largely stayed with him
He hires good people, keeps them with him
Subhash Chandra loves new ideas, Puneet is an implementer
Goenka has, in fact, never discussed how he feels about losing the company that he spent so much time building. Or about needing outside approval to run a company that was one-fifth owned by him and his family. Zee may have its share of problems, but it might emerge from them with ease, especially with a leader who stays calm and looks ahead, even in the most difficult situations.