Media magnate Subhash Chandra has resigned as chairman of his flagship firm Zee Entertainment Enterprises Ltd (ZEEL) with immediate effect.

The development comes nearly a week after the promoters sold a 16.5 per cent stake in ZEEL to financial investors, which brought down their stake to around five per cent.

In a regulatory filing to the stock exchanges, ZEEL said that Chandra expressed his intention to resign as chairman with immediate effect given the change in shareholding and the board has accepted his resignation. Chandra had founded the company in 1992.

While accepting his resignation, the board said this was also in line with Sebi listing regulations that prohibit the chairperson of the board from being related to the managing director or the chief executive officer of the company.

Chandra will remain as the non-executive director of the firm. Chandra’s elder son Punit Goenka is the managing director and CEO of ZEE.

Chandra had also expressed his desire to step aside as a board member. However, the entire board requested him to continue as a member and also to be the mentor to the executive management and its MD & CEO.

The company said three new independent directors — R. Gopalan, Surendra Singh and Aparajita Jain — have been appointed in lieu of two independent and one nominee directors of Essel Group.