Yes Bank Calls for EGM To Remove All Directors from Dish TV Board
Moneylife Digital Team 24 September 2021
Yes Bank Ltd, which owns over 25% stake in DishTV India Ltd, has called for an extraordinary general meeting (EGM) to replace the existing board of directors and appoint its own nominees on the Zee group company. 
 
In a letter to DishTV's board, the lender says earlier this month it had issued a notice under Section 169 and Section 160 of the Companies Act, 2013 for removal and appointment of directors on the company board. Yes Bank says it sent a revised letter, requesting the DishTV board to place it before the shareholders during the company's annual general meeting (AGM) scheduled on 27 September 2021.
 
"However, instead of placing the resolutions before the shareholders of the company at the AGM, which was to be held on 27 September 2021, the company 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 for holding an EGM of the Company," Yes Bank says.
 
Yes Bank also wants to replace the entire board of DishTV, including the incumbent managing director (MD) Jawahar Lal Goel, with its own nominees. Mr Goel, the younger brother of Subhash Chandra Goel, represents promoters who hold a 6% stake in DishTV. 
 
According to the lender, "the present board of DishTV has approved a rights issue process, without considering its objections, solely 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% shareholding in the company. The board is purportedly acting at the behest of certain minority shareholders, holding merely around 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 cease and desist from approving or 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 on 28 May 2021 regarding its intention to proceed with an Rs1,000 crore rights issue," Yes Bank says.
 
Yes Bank wants to appoint two of its senior officials, Akash Suri and Sanjay Nambiar, as non-executive, non-independent directors on the board of DishTV. Mr Suri is country head for stressed asset management and part of the top leadership team, while Mr Nambiar is senior group president and general counsel at Yes Bank. 
 
Yes Bank has also proposed to appoint five people as independent directors on DishTV. This includes chartered accountant (CA) Vijay N Bhatt, litigation counsel Haripriya Padmanabhan, Girish Paranjpe, operating partner with Advent International, a private equity firm, Narayan Vasudeo Prabhutendulkar, former executive director of  Hewlett Packard Enterprise India Ltd and Arvind Nachaya Mapangada, who is an independent management consultant and executive coach. 
 
Besides Mr Goel, Yes Bank also wants to remove Ashok Mathai Kurien, Dr Rashmi Aggarwal, Bhagwan Das Narang and Shankar Aggarwal as directors of DishTV. Last week, Mr Kurien had resigned from the board of Zeel Entertainment Enterprises Ltd (ZEEL) before it announced a merger with Sony Pictures Network Ltd.
 
Comments
pgodbole
1 month ago
One can see shareholder activism taking roots in India. Promoters holding insignificant equity in the Companies they run need to be alert.
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