Mumbai, June 29 -- Three proxy advisory firms have recommended that shareholders of Zee Entertainment Enterprises Ltd vote against a proposal that would effectively address the promoters' Achilles' heel-their minuscule shareholding.

Stakeholders Empowerment Services (SES), InGovern, and Institutional Investor Advisory Services (IiAS) have called for rejecting Zee's plan to issue preferential warrants to two promoter entities led by the company's founder and chairman emeritus, Subhash Chandra. The warrants, upon conversion, would lift the promoters' stake from 3.99% to 18.39%.

The proxy advisory firms cited pricing, the rationale for raising funds through warrants, and the choice of the financial instrument as the key reasons for their r...