‘Dish TV not appointing govt-okayed directors’
- Investors said the move raises suspicion that the Dish TV board is deliberately ignoring the recommendations of its largest shareholder, JC Flowers Asset Reconstruction Co.
Minority investors of Dish TV India Ltd are questioning the board’s integrity after discovering that the country’s third-largest satellite TV provider failed to induct four of the six independent directors despite the government’s approval of their appointment in December. That the board failed even to inform the exchanges has riled the investors further.
The investors said the move raises suspicion that the Dish TV board is deliberately ignoring the recommendations of its largest shareholder JC Flowers Asset Reconstruction Co.
“We have obtained information through a Right to Information (RTI) request that the Ministry of Information and Broadcasting (MIB) has approved the list of directors submitted by Dish TV for appointment to the board of the company, as per their letter dated 26 December 2022,” a letter, written by Rajeev Sangoi, representing the minority investors, said. “We believe that the board of directors has committed a serious breach of corporate governance by failing to disclose the MIB’s permission or letter to the stock exchanges… and delaying the appointment of directors approved by MIB.”
Dish TV told exchanges in August last year that the six directors could join the board once the ministry approved their candidature.
The ministry stamped its approval on the induction of six independent directors, including Sunil Gupta, Uday Varma, Madan Mohanlal Verma, Girish Paranjpe, Arvindnachya Chandranachya and Haripriya Padmanabhan.
Paranjpe, Chandranachya and Padmanabhan were part of the seven directors Yes Bank proposed in September 2021 when, alleging corporate misgovernance, it sought reconstitution of Dish TV’s board.However, Dish TV in December inducted four independent directors, which included Sunil Gupta and Madan Mohanlal Verma, whose names were already pending with the ministry. But the company also brought in Gaurav Gupta and a retired bureaucrat Lalit Behari Singh, bringing its board strength to six. Rashmi Aggarwal and Shankar Aggarwal are the two other independent directors.
Mint reviewed a copy of the letter addressed to independent directors of Dish TV and copied to the Securities and Exchange Board of India, BSE and the National Stock Exchange. Mint also reviewed a copy of the letter sent by the broadcasting ministry under the RTI request.
In a written response on Wednesday, Dish TV disputed the allegations made in the letter from minority investors, characterizing them as “wrong, malicious, incorrect, and baseless” without directly addressing the question of whether it had received a letter from the ministry regarding the appointment of directors. “We would further like to inform [you] that the company has always complied with the reporting requirement under Sebi Listing Regulation 30 and that there is no information, other than those which have already been reported by the company, which needs to be reported to the stock exchange pursuant to extant Sebi Listing Regulations (Regulation 30),” Dish TV said. “Multiple transgressions, from the company’s opaque investments in its OTT arm Watcho, to this game of musical chairs of appointing new directors every time a director’s appointment is rejected, have been brought before Sebi and the ministry of corporate affairs. We hope this episode will make at least one regulator take decisive action,” said a second executive, an investor in Dish TV, on the condition of anonymity, referring to the events over the past 18 months in this tussle between Yes Bank and the Subhash Chandra family for the control of Dish TV.
Since Yes Bank first asked for a board reconstitution in September 2021, shareholders have voted against the reappointment of Ashok Kurien, former Dish TV chairman Jawahar Goel and chief executive Anil Dua. During this time, shareholders have also rejected the induction of two other independent directors.
Essel Group founder Subhash Chandra borrowed more than ₹5,000 crore from Yes Bank, but his inability to repay the loans led the bank to invoke the shares of Dish TV that were pledged as collateral. In December, Yes Bank transferred its shares to JC Flowers Asset Reconstruction Co., which became the largest shareholder with a 24.19% stake in the company. As of 31 December, Chandra’s family, which serves as a promoter, owned 4.04% of the shares of Yes Bank.
Dish TV’s extraordinary general meeting is scheduled for 3 March, by when shareholders will have voted on the candidature of four independent directors that joined the board of the company in December last year.
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First Published:1 Mar 2023, 11:45 PM IST
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