'What's In The Past, Is In The Past,' Says Zee Ent MD & CEO Punit Goenka On Zee-Sony Merger Fallout

Following the failed merger with Sony Group Corp, Zee Entertainment's Managing Director, Punit Goenka, is steering the ship towards a resilient future, vowing to deliver substantial returns to shareholders by focusing on fiscal discipline and strategic decisions.

In an exclusive interview with The Economic Times, Goenka stated, "I've always believed in living in the present and focusing on the future. What's in the past is in the past. So, it's time to shift our focus to the journey ahead."

Undeterred by the setback, Goenka has set an ambitious target, committing to an 18-20% EBITDA margin in the fiscal year 2026, translating to over Rs 2,000 crore of EBITDA on a cash basis. He outlined his strategy, emphasizing "frugality, optimization, and a sharp focus on quality, with decisions based on return on investment" as the keys to achieving this goal.

Acknowledging the dynamic nature of the media industry, Goenka expressed his willingness to make tough calls, stating, "I have shut down more channels than I have launched in the last 20 years since I joined. If it doesn't generate profit, it doesn't belong in our portfolio."

He further iterated that Zee Entertainment would meticulously evaluate its businesses and discontinue those that fail to yield a satisfactory return on investment. Addressing recent industry developments, Goenka welcomed the Reliance-Disney merger, stating, "Competition is always welcome in our industry. I firmly believe it brings out the best in us."

On the subject of Sebi's allegations of fund diversion by Zee promoters, amounting to Rs 2,000 crore, Goenka vehemently defended the company's integrity. He highlighted the thorough audit conducted by the board and the due diligence carried out by Sony during the merger talks. Goenka stated, "While we may have made some incorrect business decisions resulting in financial losses, there has been no wrongdoing on our part."

To address the ongoing concerns, Zee Entertainment's board recently expanded the scope of an independent advisory panel to include an investigation assessment. This move comes amidst a probe by the Securities and Exchange Board of India (SEBI) against ZEE promoters Subhash Chandra and Punit Goenka for alleged fund diversion.

Recapping the regulatory developments, last August, Sebi issued an interim order barring ZEE promoters Subhash Chandra and Punit Goenka from holding directorships in listed companies due to alleged funds siphoning. Notably, Goenka received relief from the Securities Appellate Tribunal (SAT), and Chandra filed an appeal to the tribunal.

In the stock market, the fallout from the failed merger and regulatory scrutiny has led to Zee Entertainment's shares trading with cuts of nearly 2% at Rs 155.85 per share on the National Stock Exchange (NSE) as of 1:15 pm.