Jawahar Goel-backed Dish TV has written to the Securities Exchange Board of India accusing YES Bank of violating the takeover regulations by not announcing an open offer even as the bank sought to oust the board of directors of the direct-to-home television service provider.
Dish TV has alleged that YES Bank has sought to take control of the company by proposing to remove the existing board of directors which triggers an open offer.
YES Bank along with IDBI Trusteeship Services Ltd owns 25.63 per cent of the company. The bank had acquired the shareholding as a result of the invocation of pledges in three tranches between May 29, 2020, and July 9, 2020. While this would have triggered an open offer under normal circumstances, YES Bank, being a scheduled commercial bank, had availed of the general exemption under the Takeover Regulations on grounds that it had acquired the shares pursuant to invocation of pledged shares.
According to Dish TV, the exemption would not be valid the moment the bank sent a notice in September to oust the existing board members and appoint new directors nominated by the bank as it tantamounts to taking control of the company.
“The company believes that the actions of YES Bank in sending the September 3 notices, September 9 notices and the EGM notice are in violation of the Takeover Regulations. If YES Bank’s proposal to appoint certain individuals to the board of the company, together with the resolution(s) proposed for removal of the existing directors (except for Anil Kumar Dua), is given effect, it shall lead to YES Bank acquiring control over the company,” Dish TV said in its letter to SEBI.
The company said the notices would have necessitated an open offer to be made by YES Bank for acquiring shares from the public shareholders. “No such public announcement has been made by YES Bank, and thus, the aforesaid notices are in violation of the Takeover Regulations,” Dish TV said.
YES Bank did not respond to an e-mail sent by BusinessLine on Friday.
Further, Dish TV said that even if YES Bank makes an open offer, there remains a possibility that the shareholding of YES Bank in the company may cross 30 per cent “which shall be in complete violation of Section 19 of the Banking Regulation Act, 1949 (BR Act). Section 19 of the BR Act prescribes that no banking company shall hold shares in any company, whether as pledgee, mortgagee, or absolute owner, of an amount exceeding 30 per cent of the paid-up share capital of that company or 30 per cent of its own paid-up share capital and reserves, whichever is less,” Dish TV said.
‘Probe YES Bank’s actions’
The company has asked SEBI to investigate the actions of YES Bank in proposing the revamping of the board.
“The company further requests your good offices to issue necessary directions in the matter to YES Bank to immediately withdraw the EGM notice sent to the company and to cease and desist from taking any further actions in respect of the EGM notice and not continue the violations of the Takeover Regulations,” Dish TV said.
Dish TV and YES Bank have been at loggerheads ever since the bank sent a notice requesting for an extraordinary general meeting (EGM) of the shareholders to seek approval for its proposal to revamp the board of the company. The EGM will now be held on December 30. The Hindu BusinessLine