Private sector lender Yes Bank on Thursday has issued a notice to Dish TV, requisitioning an extraordinary general meeting (EGM) to consider the reconstitution of the board, CNBC-TV18 reported on Thursday. Although Dish TV denied receiving any such notice from Yes Bank earlier in the day, by evening, the company confirmed the receipt of Yes Bank’s letter.
The bank said it had issued several notices to Dish TV, seeking the removal and appointment of directors on the board between September 6, 2021, and September 18, 2021. However, Yes Bank said in its notice to Dish TV, "instead of placing the resolutions before the shareholders of the company at the AGM, which was to be held on September 27, 2021, the company (Dish TV) is now seeking an extension of the date of holding AGM based on unfounded reasons. In light of the company engaging in dilatory tactics in placing the resolutions before the shareholders, the bank is constrained to issue the present notice under Section 100 of the Companies Act, 2013 for holding an extraordinary general meeting of the company."
Dish TV had notified exchanges on September 19 that its board had decided to file relevant applications under Companies Act "for seeking extension of time under applicable regulatory provisions for convening the Annual General Meeting of the company which is presently scheduled to be held on September 27, 2021, so that the company has sufficient time to evaluate, analyze and to ensure compliance of all applicable regulatory, and other approvals as required by the law and avoid any non-compliance to contractual obligations." The company had said it was in the process of getting necessary approvals from its lenders on Yes Bank’s proposed board constitution.
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On September 4 in a special notice, Yes Bank asked Dish TV to consider and pass the resolution to remove five directors from the company’s board. This included the founder-promoter & director of Dish TV Ashok Mathai Kurien and Jawahar Lal Goel who is the managing director and chairperson of the firm. Rashmi Aggarwal, Bhagwan Das Narang, and Shankar Agganval were the other directors Yes Bank sought to remove.
The bank also sought to nominate seven directors on the board of Dish TV. In the same September 4 special notice, it said, "...propose the appointment of Akash Suri as non-executive non-independent director, Sanjay Nambiar as non-executive non-independent director, Vijay Bhatt as independent director, Haripriya Padmanabhan as independent director, Girish Paranjpe as independent director, Narayan Vasudeo Prabhutendulkar as independent director, and Arvind Nachaya as independent director."
Dish TV had claimed that such a reconstitution would require prior approval from the ministry of information and broadcasting, and hence it could not place the resolution before shareholders, therefore the need to delay the AGM.
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"We understand that the company is required to seek an approval from the MIB in connection with the appointment of the new Directors. In this regard, please note that removal of the aforesaid directors will be with effect from such date when approval of the MIB (and any other regulatory authority, if required) is received for appointment of one or more new Directors on the Board, provided that the minimum number of Directors on the Board shall be in compliance with applicable laws," Yes Bank said in its notice, seeking an EGM be held.
The letter went on to allege that Dish TV’s 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% shareholding in the company. The Board is purportedly acting at the behest of certain minority shareholders holding merely 6% of the shares in the company. This is reflected from the fact that even though the Bank, vide various letters issued to the Board, asked the Board to desist from approving/conducting the proposed capital raising exercise by way of the rights issue, the board, without consulting the significant shareholders of the Company, went ahead to make a press announcement dated May 28, 2021, regarding its intention to proceed with a Rs 1000 crore rights issue."
Yes Bank also said that Dish TV had completely side-lined the multiple requests of the Bank to reconstitute the board. “The Board has not acted on the legitimate request of the Bank…The board has acted in complete haste and taken arbitrary decisions to proceed with the rights issue process (i) completely disregarding other viable and possible options for fund raising that would be in the best interest of the company and its stakeholders, (ii) solely to cause prejudice and to defeat/dilute the rights and entitlements of the significant shareholders by diluting their stake in the Company, and (iii) even after being aware that the matter is under consideration before the Securities and Exchange Board of India and the stock exchanges pursuant to our letter dated June 19, 2021," Yes Bank said in its notice.
Yes Bank is the single largest shareholder in Dish TV with a 25.63 percent stake.
"The Board is requested to take all necessary action to call for and conduct the extraordinary general meeting, as requisitioned by us, in accordance with applicable law, including Sections 100, 101 and 102 of the Companies Act, 2013 read with applicable Rules framed thereunder, failing which we shall proceed to call for and conduct the extraordinary general meeting pursuant to our rights under Section 100(4) of the Companies Act, 2013. The bank also reserves the right to move the competent judicial authorities for appropriate relief(s)," Yes Bank said.