Dish TV shareholders vote against annual accounts, director appointment

77.63% of votes cast against adoption of annual audited financial statements

The shareholders of satellite TV broadcaster Dish TV India rejected the adoption of the company’s annual accounts and the reappointment of Director Ashok Kurien to the company’s board. The company had held its annual shareholders’ meeting on December 30, but did not disclose the results citing pending litigation.

According to the voting results announced on Tuesday — a day after the Securities and Exchange Board of India sent a notice to Dish TV India for non-disclosure of AGM results – the company said 77.6 per cent of votes were polled against the adoption of annual accounts and 78.9 per cent of votes were cast against Kurien’s reappointment.

Additionally, 53.4 per cent of votes were cast against giving remuneration to the cost auditors for the financial year 2021-22 (FY22).

Experts said the disclosure shows that the firm’s shareholders have lost faith in the management and the board of directors. “This was on expected lines as YES Bank held 25.6 per cent stake and the lenders now hold the majority stake. As the adoption of accounts has been rejected, the firm and the board will have to re-audit and present it to the shareholders,” said Shriram Subramaniam, founder and managing director of InGovern Advisory, a shareholders proxy advisory firm.

Sebi order

In its order on Monday, Sebi asked depositories to freeze the directors’ and compliance officer’s demat accounts till the voting results were disclosed on the stock exchanges or till further orders.

It hauled up independent directors for their failure to uphold high ethical standards, help the company implement best corporate governance practices, and safeguard the interests of stakeholders.

Sebi cited the Bombay High Court that did not prohibit the company from disclosing the outcome of the AGM. However, Sebi said by taking an erroneous stance that the matter was sub-judice Dish TV has been delaying the disclosure, knowing full well that there is no such stay in operation, and restraining the company from disclosing the outcome of the AGM.

Subsequently, the Bombay HC had clarified that pendency of the Dish TV case will have no bearing on the disclosure requirements of Sebi. As Dish TV did not disclose the results, Sebi ordered it to immediately disclose the results.

Sebi said the Bombay High Court had in its order dated December 23, 2021, while rejecting any ad-interim relief, did not prohibit the company from disclosing the outcome of the AGM.

Road ahead
 

The banks will now move in to take charge of the company’s board and appoint their own nominees. On September 26, YES Bank had asked the company to call an extraordinary general meeting of shareholders to appoint its nominees and remove Chief Executive Officer and MD Jawahar Lal Goel, and directors Ashok Kurien, Rashmi Agarwal, Bhagwan Das Narang, and Shankar Aggarwal from the board.

YES Bank had earlier said Dish TV’s board was acting at the behest of the promoters and approved a Rs 1,000 crore rights issue despite its objections. YES Bank has said Indian lenders own 45 per cent stake in the company and that it was taking the step to protect the rights of all shareholders.

The promoters, the Chandra family, currently own 6 per cent stake in the company. Indian lenders had seized the shares pledged by the promoter entities following a default. The shareholding of the family in the group flagship, Zee Entertainment Enterprises, also fell to 4 per cent after the lenders invoked pledged shares. Last December, Zee announced a merger with Sony Pictures Network with the promoters getting a 4 per cent stake in the merged entity.