DishTV seeks more time for AGM after Yes Bank notice regarding directors

Time sought to allow firm to comply with all applicable laws in respect of the notices and ensure it does not default on regulatory and lender covenants

Dish TV India has sought deferment of the annual general meeting (AGM), which was scheduled to be held on September 27, after Yes Bank, one of the shareholders of the company, sent notices seeking removal and appointment of certain directors.

The company said the board has sought additional time to hold the AGM so that they can ensure compliance of all applicable laws and guidelines in respect of the notices sent by Yes Bank and also to ensure that the company does not default on any of the regulatory and lender covenants.

In a notification to the exchanges, the company said, " ..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 currently scheduled to be held on September 27, 2021..".

This has been done so that the company has sufficient time to evaluate, analyse and ensure compliance of all applicable regulatory, and other approvals as required by the law and avoid any non-compliance to contractual obligations.

Yes Bank, which holds 25.63 per cent stake in the company, sent a notice under under Section 160 and Section 169 of the Companies Act, 2013 seeking removal of of five directors in the company, including the managing director (MD) Jawahar Lal Goel for alleged haste and arbitrary decisions to proceed with the rights issue despite objections raised by bank.

Subsequently, it also sought appointment of seven directors Akash Suri, Sanjay Nambiar, Vijay Bhatt, Haripriya Padmanabhan, Girish Paranjpe, Narayan Vasudeo Prabhutendulkar, and Arvind Nachaya.

The proposed change in the board is subject to applicable regulatory permissions and also other approvals which the company requires to obtain, the company said in the exchange notification.

It has also made necessary applications to the lenders for seeking their consent for the changes in the board of directors of the company under applicable covenants, approval on which is awaited.

The bank in its notices said the present board of directors of the company (Dish TV) has approved a rights issue process, despite objections raised with the board by the bank time and again, solely to dilute the shareholding of the bank and to prejudice the interests of the bank, which is the single largest shareholder of the company.

The bank further said the company’s board is not acting in line with good corporate governance standards. It further said the board is perhaps acting at the behest of certain minority shareholders holding merely 6 per cent 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 1,000 crore rights issue.

DishTV in its response to YES Bank has said the board of directors had appointed a sub-committee (comprised of all Independent Directors) to consider various options for fundraising. Subsequently, after much deliberation and basis recommendation of the sub-committee, the board of directors had decided to raise capital via a rights issue.