Dish TV India, one of the largest direct-to-home satellite broadcasters in the world, said a shareholder resolution calling for the removal of its chairman and certain directors as proposed by YES Bank cannot be implemented without the approval of the government and lenders, and therefore, the DTH company has sought permission to postpone the annual general meeting.
YES Bank, which holds close to 26% of the company’s shares, had earlier in the month sought to move resolutions at the upcoming AGM seeking the removal of Jawahar Goel — brother of group founder Subhash Chandra — from his position of Chairman and Managing Director.
The bank, which is by far the biggest shareholder in the company, also sought to remove several of the company’s independent directors, alleging that the current board of directors was not representative of the current shareholding structure and was also not “acting in line with good corporate governance standards”.
In its letter on Sep 3, the YES Bank said the board of directors “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 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 INR 1,000 Cr. rights issue,” the Yes Bank added.
In its statement today, Dish TV said the resolution cannot be put in front of the shareholders without obtaining requisite permissions from the government and from banks which have lent money to the company.
Hence, it has decided to seek permission to postpone the annual general meeting, originally scheduled to be held on Sep 27 (eight days from now).
“The proposed change in the Board is subject to applicable regulatory permissions and also other approvals which the Company requires to obtain. Post receipt of the Notices from YBL [Yes Bank], the company [Dish TV] has also made necessary applications to the Lenders for seeking their consent for the said change in the Board of Directors of the Company under applicable covenants, approval on which is awaited.
“Accordingly, in order to ensure compliance of all applicable laws and guidelines in respect of the Notices sent by YBL and also to ensure that the company does not default on any of the regulatory and lender covenants, the Board of Directors of the company have today approved making requisite applications as per provisions of the 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.”
Dish TV is not the only group company facing a similar action from major shareholders.
A week ago, Zee Entertainment Enterprises too said its shareholders, Invesco Developing Markets Fund and OFI Global China Fund, which together own around 18% of the company, have sought an extraordinary general meeting of shareholders to put up for shareholder approval a resolution to remove Managing Director Punit Goenka, one of Subhash Chandra’s sons.
A large chunk of various Zee group companies’ shares passed into the hands of financial institutions after the Subhash Chandra family was forced to pledge or sell its shares to pay off private debt.