The lender had earlier called for ousting the company’s board and appointing new directors
Private sector lender YES Bank may look at legal recourse if its attempt to remove directors from the board of Dish TV and appoint new ones is unsuccessful.
The bank is the largest shareholder of Dish TV with over 25 per cent equity and is keen on understanding the financials of the company and measures to improve its performance.
“This is an unprecedented move by YES Bank. The bank is extremely serious about the issue and wants to bring in a new board to get the company on track,” said a person familiar with the development, adding that it would also be willing to look at legal alternatives if it is unable to appoint directors on the board of the company.
Sources said the bank is also keen on understanding the investments made by Dish TV and feels that satisfactory disclosures have not been made.
YES Bank did not respond to an e-mail query by BusinessLine on the issue.
Earlier this month, YES Bank had called for removing Dish TV’s board on the grounds that it is purportedly acting at the behest of certain minority shareholders holding a mere 6 per cent of shares in the company. It also called for the appointment of Akash Suri, Country Head, Stressed Asset Management, YES Bank, as a non-executive, non-independent director of Dish TV.
AGM on Sept 27
The annual general meeting of Dish TV is scheduled for September 27 where the proposals may be taken up pending approval from the Ministry of Information and Broadcasting for the appointment of new directors.
Dish TV’s statutory auditors have raised concerns about investments in “new technologies recorded as intangible assets under development and related capital advances amounting to ₹552 crore and ₹685.85 crore”.
“The management has not carried out a detailed impairment testing for intangible assets under development and related advances, inter alia, involving independent valuation experts, evaluating Impact of competition on related business plans and performing sensitivity analysis of future cash flows expected from these assets,” they had said.
However, the Dish TV management said that in line with new-age technologies — Watcho the OTT platform, networking equipment and customer premises equipment (CPE) — Dish Infra Services, a wholly owned subsidiary company, had made significant progress in augmenting the new age technologies in previous year.
“The subsidiary company had contracted with aggregators for content and related infrastructure and recorded ₹552 crore as intangible assets under development and ₹685.85 crore as related capital advances as of March 31, 2021,” it had said, adding that the process could not be completed within the planned time frame due to Covid-19 lockdown and restrictions imposed across the country during the year.
Proxy advisory services firm SES, in a report on Dish TV, pointed out that the statutory auditors had made qualified opinion in their report on standalone financial statements and consolidated financial statements of the company. “This is the second such successive qualification in two financial years wherein the auditors have highlighted weakness in internal financial controls and especially with respect to management not carrying out detailed impairment testing,” it said. The Hindu BusinessLine