On Friday, Dish TV India nominated Rakesh Mohan, a former joint secretary in the ministry of information and broadcasting, as a non-executive independent director. The nomination and remuneration committee of the board and the ministry of information and broadcasting both approved Mohan’s appointment. The Goel family, who founded the company, is engaged in a management control conflict with the bank.
The bank had objected to the idea, claiming that the rights issue would reduce the value of its holdings. Then, it demanded the dismissal from the board of five directors who had ties to the Goels. Jawahar Goel and Ashok Kurien have both received denials for additional terms as managing directors (MD) and directors, respectively. During the extraordinary general meeting (EGM) last month, Goel was rejected. The company’s annual general meeting (AGM), which was conducted in December of last year, rejected Kurien’s nomination.
YES Bank currently holds a 24.7% ownership in Dish TV, while the former promoters hold a 5.9% stake. The shareholders of the business must approve Mohan’s appointment. Since last year, when the direct-to-home broadcaster decided to raise Rs 1,000 crore through a rights issue, YES Bank has been engaged in litigation with the Goels of the Essel group.
The current board is made up of Jawahar Goel, three independent directors (Bhagwan Das Narang, Rashmi Aggarwal, and Shankar Aggarwal), and Goel himself. All three of the independent directors are NRC members. The Goels had petitioned the Bombay High Court for redress, but the court found in the bank’s favour.
“The bank wants to sell its 24.7 per cent stake in the company but the acquirer wants to buy the stake without any legacy legal issues,” said a legal source.
Last month, as many as 78.9% of shareholders opposed the resolution that would have reinstated Jawahar as Dish TV’s MD. However, Goel is still a board member of Dish TV because the articles of association state that the promoter will serve as a non-retiring director. Only 26.1% of shareholders opposed the proposal to re-appoint Anil Dua as a full-time director. The company’s chief executive officer (CEO), Dua, has kept his job. In order for YES Bank to sell its stake to a competing satellite TV provider like Bharti Airtel, Dish TV’s board of directors must be reorganised.
The buyer, however, does not want any pending litigation on the control of the board which has delayed the sale,” said a source.
Other significant shareholders besides YES Bank seek to sell their shares in the losing business. As of Friday, Dish TV had a market value of Rs 2,065 crore. As a result of the promoters’ failure to pay the bank their debts totaling Rs 5,000 crore, YES Bank had to purchase Dish’s interest. Bolly Inside