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Business News/ Companies / News/  'Businesses that do not yield profits will be chopped off': Zee MD unveils stringent plans after failed merger with Sony
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'Businesses that do not yield profits will be chopped off': Zee MD unveils stringent plans after failed merger with Sony

Zee Entertainment MD Punit Goenka said the management will be evaluating the businesses with a final lens, determining when and how they will be shut down

Punit Goenka, Managing Director and CEO of Zee Entertainment Enterprises Limited in Mumbai. Photo Abhijit Bhatlekar/ MintPremium
Punit Goenka, Managing Director and CEO of Zee Entertainment Enterprises Limited in Mumbai. Photo Abhijit Bhatlekar/ Mint

After the failed merger with Sony Group Corp, Zee Entertainment MD Punit Goenka said his focus is now to ensure the company continues to deliver value to shareholders.

"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," Goenka said in an interview with The Economic Times said.

He added, "I have committed publicly to my shareholders that in FY26, I will deliver an 18-20% EBITDA margin, which should roughly translate to over 2,000 crore of EBITDA on a cash basis".

Further Goenka explained through "frugality, optimisation and sharp focus on quality and decisions based on the return of investment" Zee will be able to achieve 2,000 crore EBITDA by FY2026.

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The Zee Entertainment MD added that he would "chop off" businesses that do not yield a return on investment.

"I have shut down more channels than I have launched in the last 20 years since I joined. I firmly believe that if it doesn't generate profit, it doesn't belong in our portfolio," Goenka said in the ET interview.

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Goenka said management will be evaluating the businesses with a final lens, determining when and how they will be shut down.

On the Reliance-Disney merger, Goenka said "Competition is always welcome in our industry. I firmly believe it brings out the best in us".

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On Sebi's allegations that fund diversion by Zee promoters could be as high as 2,000 crore, Goenka asserted that the board has done a full audit. He said Sony did due diligence during merger talks, Grant Thornton also did a special audit, he said. "While we may have made some incorrect business decisions that resulted in financial losses, there has been no wrongdoing on our part. If certain businesses, such as Margo, have experienced losses, it’s due to legitimate business risks and decisions, not any fraudulent activities," he added.

Last week, the Zee Entertainment board said it has expanded the scope of an independent advisory panel to include an investigation assessment.

The announcement by the company comes amid a probe by market regulator Sebi against its promoters for alleged fund diversion.

Zee sets up panel to probe regulator’s allegations against company, promoters

Last year in August, Sebi through an interim order barred ZEE promoters Subhash Chandra and his son Punit Goenka from holding any directorships in listed companies, over allegations of funds siphoning.

However, Goenka, the Managing Director and CEO of ZEEL, was granted relief by the Securities Appellate Tribunal (SAT). Chandra had also filed an appeal in the matter to the tribunal.

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Published: 04 Mar 2024, 09:30 AM IST
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