The legal tussle between YES Bank and the promoters of satellite TV broadcaster Dish TV India is set to move to the Supreme Court as the Subhash Goel family plans to appeal against the Bombay High Court order which resulted in the family losing the top management positions.
A new restructured board of Dish TV is necessary for YES Bank to sell its stake to a rival satellite TV broadcaster, say sources. “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 close to the development.
YES Bank has approached Bharti Airtel to sell its stake but the litigation between the Goel family, which owns six per cent in Dish and controls the board, and YES Bank is delaying the transaction. Apart from YES Bank, other large shareholders also want to sell their stake in the loss-making company, which had a market value of Rs 2,216 crore as on Friday.
YES Bank did not comment on the issue.
Last September, the lender had asked Dish TV to call a shareholders’ meeting to replace the entire board and replace it with its own nominees, but the bank’s resolutions were not placed before the shareholders. YES bank in another letter dated June 25, 2021 had sought induction of its two nominees — Akash Suri and Sanjay Nambiar as additional directors on Dish TV board. But Dish TV board did not heed to the bank’s request.
“With the Bombay HC’s decision against Dish TV, the matter will have to be sorted out by the Supreme Court for clarity,” said a corporate lawyer, asking not to be quoted. On Friday, Jawahar Goel’s reappointment as managing director of Dish TV was thwarted with as much 78.9 percent of shareholders voting against the resolution. Anil Dua’s reappointment as a whole-time director, on the other hand, saw only 26.10 per cent shareholders voting against the resolution. Dua has also retained his position as CEO of the company, implying that Dish TV could function without an MD for now, persons in the know said.
Also, Goel remains as non-executive director on the Dish TV board, implying that he may continue to have some influence on board outcomes and decisions, persons in the know said.
“The next step would be to find a suitable replacement to the MD which is acceptable to all shareholders,” Shriram Subramaniam, founder and managing director of InGovern Research Services, a proxy advisory firm, said. YES Bank has been fighting with the Goels since last year when the DTH operator decided to raise Rs 1,000 crore via a rights issue. YES Bank, had raised an objection to the proposal and sought removal of five directors close to the Goels from the board.
Of these, Goel and Ashok Kurien have been denied new terms as MD and director respectively on two separate occasions. While Goel’s rejection happened during the extraordinary general meeting on Friday, Kurien’s rejection as director happened during the firm’s annual general meeting held in December last year.
At present, independent directors Rashmi Aggarwal, Bhagwan Das Narang and Shankar Aggarwal, whom YES Bank wishes to replace, continue to be on the company’s board. They were present during the EGM on Friday.
Besides, R C Venkateish, who was seeking appointment as an independent director on Friday, was not permitted to do so, since the resolution received only 26.7 per cent votes during the EGM.
YES Bank, meanwhile, had sought the appointment of Akash Suri, Sanjay Nambiar, Vijay Bhatt, Haripriya Padmanabhan, Girish Paranjpe, Narayan Vasudeo Prabhutendulkar, and Arvind Nachaya Mapangada as new independent directors of Dish TV.
These appointments are pending due to ongoing litigation. Business Standard