YES Bank, which holds 25 per cent stake in Dish TV, has proposed to oust the company’s entire board, including Jawahar Lal Goel, the promoter and Managing Director.
The bank said the existing board is purportedly acting at the behest of certain minority shareholders holding a mere 6 per cent of shares in the company.
YES Bank has issued a notice asking the company to put its proposal to vote at Dish TV’s annual general meeting on September 27.
The bank said the company’s present board of directors has approved a rights issue process despite objections raised by the bank “to dilute the shareholding of the bank and to prejudice the interests of inter alia, the bank, which is the single largest shareholder of the company as of date.”
“The board is not acting in line with good corporate governance standards and is not a fair representation of the incumbent significant shareholders of the company being various banks and financial institutions holding about 45 per cent shareholding in the company,” it added. In May last year, the private lender had acquired the stake in direct-to-home service provider, Dish TV India Ltd, by invoking pledges against 44.53 crore equity shares kept as collateral with the private lender for a loan. Goel’s brother Subhash Chandra, had recently said that a “substantial portion” of Goel’s equity in Dish TV was offered as security for the credit facilities taken by Chandra’s Essel group.
YES Bank had asked the board to desist from approving the capital-raising exercise by way of a rights issue. “However, the board, without consulting the significant shareholders of the company, went ahead to make a press announcement on May 28, 2021 regarding its intention to proceed with a ₹1,000-crore rights issue,” the bank said.
In its response, Dish TV said the decision to go for a rights issue was taken by the company’s management after the board of directors had appointed a sub-committee (comprising all independent directors) to consider various options for fund-raising.
“Subsequently, after much deliberation and based on the recommendation of the sub-committee, the board of directors had, on June 21, 2021, decided to raise further capital vide a rights issue… to ensure smooth continuity of the business and to protect the interest of all its stakeholders,” Dish TV said.
Yes Bank has also charged the board of ignoring the bank’s requests to reconstitute the board. Sanjay Nambiar, Senior Group President and General Counsel at YES Bank; Akash Suri, Country Head, Stressed Asset Management at YES Bank; Viiav Bhatt, former KPMG executive; Haripriya Padmanabhan a litigation counsel; and Girish Paranjape, former Co-CEO of Wipro’s IT Business are among the names proposed by Yes Bank for reconstituting the board.
Dish TV said the proposed new directors could be appointed only after obtaining approvals from the Ministry of Information and Broadcasting. The Hindu BusinessLine