Proxy firms InGovern and SES remain at loggerheads in their approval of Zee Entertainment Enterprises’ proposal to issue fully convertible warrants to the promoter group on a preferential basis.Zee has proposed, for the second time, a preferential issuance of up to 24.95 crore fully convertible warrants to Sunbright Mauritius Investments Ltd, at ₹126 per warrant, raising up to ₹3,143.52 crore. Last year, shareholders rejected the special resolution which failed to get the requisite majority of 75 per cent votes.According to proxy firm SES, the company sufficiently justifies the move with detailed disclosures regarding the different objectives for which the funds raised shall be utilised, along with the year-wise break-up of such utilisations.“Although SES is generally against dilution of more than 5 per cent, yet in this case SES is guided by the fact that promoters are in control with miniscule equity and there is hardly any skin in the game by way of financial exposure. The issue is going to bring their skin in game,” said SES in its report, while acknowledging that a Right Issue of this magnitude may be a risky proposition considering past setbacks and performance in the security market of most media companies.Noting that the issue of warrants is at substantial premium, Zee needs funds to survive the competitive environment and past failed attempts of merger, failed proposal to raise money, does not appear conducive to any other mode of fund raising, said SES.Meanwhile, InGovern argued that the terms for issuance of warrants to promoter group appear unreasonable or disproportionately favourable and would lead to excessive dilution of minority shareholders.“Considering the significant promoter-only dilution, embedded optionality in the warrant structure, inadequate justification for the chosen funding route, limited disclosure on promoter financing, and continuing regulatory and accountability overhang, InGovern recommends that shareholders vote against the special resolution,” said InGovern in its recommendation to shareholders.The firm argued existing liquidity on the balance sheet and inadequate justification of internal accruals or less dilutive routes (like rights or QIP). Further, recent history shows governance challenges or shareholder pushback on similar proposals, it said.Responding to InGovern’s concerns on dilution, Zee asked the proxy firm to consider the resulting clearly defined, disclosed capital programme. This includes ₹10,000 million for sports rights and production, ₹4,500 million for content, technology and digital initiatives, ₹4,500 million for micro-drama, ₹3,000 million for kids’ edutainment and animation, and ₹9,440 million held for potential M&A.Similarly, addressing the allegation of inadequate justification for capital raise, it said, “The board chose to secure this capital in a single transaction rather than return to shareholders repeatedly over the next three years, and we are confident that is the right approach for the company and for our shareholders.”Published on July 27, 2026