The Supreme Court of India on Tuesday unfroze a restriction imposed by the police on Yes Bank Ltd.’s voting rights in Dish TV India Ltd. This will allow Yes Bank to vote in the annual general meeting of the direct-to-home service provider, except the AGM slated to take place on Nov. 30 has been postponed.
The freeze on voting rights of shares held by Yes Bank was due to a notice issued by the Uttar Pradesh police (Office of Crime Branch, Gautam Buddh Nagar) on Nov. 5 which directed the bank not to transfer or exercise any rights as shareholder of Dish TV. The bank has a 24.78% shareholding in the company on account of invocation of pledge in May 2020.
Following the freeze, Yes Bank moved the Supreme Court seeking a quashing and stay of the police notice.
Senior Advocate Abhishek Manu Singhvi argued for the bank that the action was a misuse of the criminal process. The notice was issued on an FIR registered in August 2020, said Singhvi, and the civil proceedings were withdrawn earlier this year.
Yet in November, Singhvi said, the police issued the notice.
The top court expressed displeasure on the police action and pointed out that police cannot be given such powers. We cannot permit police officers sitting in Gautam Buddha Nagar to freeze voting rights of a shareholder, said Justice DY Chandrachud.
Kapil Sibal, counsel for Subhash Chandra, the founder of Dish TV and who has filed a case against Yes Bank that resulted in the freeze, sought the freeze to continue but the court refused.
The bench made it clear that there are other forums through which such reliefs can be sought but not through a police officer.
Meanwhile, Dish TV informed shareholders late evening Nov. 29 that its request for time extension to hold the AGM had been granted by the Registrar of Companies and the board has approved the extension of the AGM, to be held within a month from now.
Yes Bank has sought an extraordinary general meeting of Dish TV’s shareholders to replace board directors on account of governance concerns. The EGM requisition was rejected by Dish TV’s board.
Subhash Chandra, founder of Dish TV and brother of its current promoter Jawahar Goel, had last year filed a police complaint against Yes Bank and its founder Rana Kapoor, alleging fraud in the bank’s conduct of a merger between the company and Videocon D2H in 2016. Bloomberg Quint