ZEE shareholders reject special resolution of promoter group to infuse ₹ 2,237 crore

ZEE Entertainment Enterprises said on Thursday that its shareholders rejected a special resolution to allow promoter group entities to infuse a capital of ₹2,237 crore via warrants. Approximately 60% of shareholders supported the resolution to issue fully convertible warrants to promoter group entities. The company expressed gratitude for the support received and respect for the differing views of the remaining shareholders.

The resolution is being framed as a move to bolster ZEE’s ability to respond to rapid shifts in the media and entertainment landscape. The move is being closely watched by market participants as ZEE charts its course following the collapse of its proposed merger with Sony Group’s India operations and ongoing strategic recalibrations in a rapidly evolving industry. The resolution comes at a time when ZEE is navigating a highly dynamic media environment, one marked by rising content costs, shifting viewer preferences, and aggressive competition from digital and OTT platforms.

ZEE also emphasised that it has made “significant efforts” to improve its financial fundamentals, particularly by enhancing margin profiles and reducing losses in its digital segment. The company cited a need to maintain a “sufficient war chest” to drive technology investments, withstand market volatility, and remain competitive.

Amid the ongoing consolidation wave in the entertainment industry—epitomised by the merger of Disney’s assets in India with Reliance’s entertainment arm— ZEE, in 2021, proposed a merger with Sony Pictures Networks India. However, come January 2024, Sony Pictures Networks India formally terminated its proposed ₹ 80,000 crore (~$10 billion) merger with Zee Entertainment, citing several major roadblocks.

Sony stated that Zee failed to meet key financial terms—including minimum cash reserves—and baulked at extending the agreed-upon merger deadline of January 21, 2024. A leadership dispute also came to the fore, as Zee expected Punit Goenka to lead the combined entity. Sony objected due to ongoing regulatory scrutiny around his appointment and pushed for its own CEO, NP Singh. 

Sony flagged over 20 compliance breaches, including Zee’s failure to divest its Russian subsidiaries (subject to U.S. sanctions) and its massive ₹1.4 billion cricket rights deal with Disney, which it claimed violated agreed-upon terms.

After the merger was called off, legal disputes ensued. Zee withdrew its tribunal petition to enforce the merger, opting instead to pursue arbitration in Singapore. By mid‑2024, they reportedly settled many disputes, allowing Zee and Sony India to end legal hostilities and move forward. Shares of ZEE dropped between 27 and 34% after the deal collapsed, as it meant the creation of one of the largest TV and streaming networks could not fructify.